Huge investor group met with EC chief Barroso in low carbon push ahead of Prince Charles speech

Some of the world’s leading institutional investors representing around €8 trillion in assets met with José Manuel Barroso, President of the European Commission, at a breakfast meeting on Wednesday this week to lobby for low-carbon investment as the most effective driver of economic recovery. The investors from the P8 group and the Institutional Investors Group on Climate Change (IIGCC), presented to the EC alongside representatives of Prince Charles, The Prince of Wales’s EU Corporate Leaders Group on Climate Change, in advance of Prince Charles’ own major address yesterday to a Low Carbon Prosperity Summit in Brussels hosted by Jerzy Buzek, President of the European Parliament. The investor involvement signals a significant rise in the importance of institutional investors, notably pension funds, in the political discussion on financing climate change solutions. The IIGCC comprises more than 70 European pension funds and asset managers with a combined worth of around €6trn. The Prince Charles-backed P8 group includes some of the world’s largest pension fund investors including CalPERS, CalSTRS and the New York State pension funds in the US, AP7 in Sweden, The Australian Council of Superannuation Investors, and the Korean National Pension Service.
At the Brussels summit, Prince Charles warned that ignoring environmental concerns would damage the ability of countries to maintain economic growth. He also criticised climate change sceptics, asking how they could ignore “all the clear warning signs by passing them off as merely part of a cyclical process”. The summit was attended by over 300 Members of the EuropeanParliament and economists including Lord Nicholas Stern. At the meeting with EC chief Barroso, the investor and corporate delegation called for clear policy frameworks and timetables that would give them confidence in the future direction of climate regulation. They said recent retroactive policy changes had seriously undermined the confidence of investors and weakened their appetite for policy backed low carbon investments. Consequently, more ambitious short-term and medium term policy targets were needed, they said, to help drive up the carbon price and incentivize low carbon investments to reach the EU’s 2050 GHG emissions reduction targets of 80-95%. The delegation called for a revision of the EU budget for 2014-2020 based on funding for low-carbon energy technology research, development and deployment, and new ‘smart green’ low-carbon solutions in the building and ICT sectors. Consumer initiatives such as low carbon education programmes and labelling schemes, they argued, would also help inform consumer choice, stimulate product innovation and create new markets. David Russell Co-head of Responsible Investment at UK pension fund, USS, said: “Public policy is critical to encouraging investments in a low carbon economy as it supports the adoption and development of new technologies and creates a level playing field for renewable energy investments. Policy makers must realise that nothing is as effective in discouraging investors as policies that keep changing. Targets and policies, therefore, need to be clear, effective, and long term.”