Governance

Portfolio Decarbonization Coalition smashes through $100bn target

Aim is to mobilise institutional investors to decarbonize their portfolios

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Steiner: investors are recognizing climate risks

The Portfolio Decarbonization Coalition, formed just over a year ago to help cut greenhouse gas emissions by mobilising institutional investors committed to decarbonizing their portfolios, has smashed through its initial target of $100bn.

The PDC says it is now overseeing the decarbonisation of $230bn in assets under management. The initiative was co-founded by the United Nations Environment Programme (UNEP) and its Finance Initiative (UNEP FI), Sweden’s Fjarde AP-fonden (AP4), French asset management giant Amundi and environmental data body CDP; it was unveiled at the UN Climate Summit in New York in September 2014.

It comes as Hermes Investment Management in the UK, MN Services in the Netherlands, France’s BNP Paribas Investment Partners, Humanis, and Caisse des Dépôts have joined the coalition – taking the total number of members to 23. Further announcements of new members are planned for COP 21, the crunch climate talks in Paris which start next week.“The success of the PDC is a clear signal that more and more leading investors are recognizing the inherent risk that climate change poses to their portfolios,” said UNEP Executive Director Achim Steiner. He hoped it would inspire other investors. CDP Executive Chairman Paul Dickinson said the momentum of the PDC shows we’ve reached a “tipping point in the way investors view the impacts of climate change”.
The PDC is “agnostic” as to how investors commit to calculating their carbon-footprints – though members will have to disclose the method used in calculations.
Frédéric Janbon, CEO BNP Paribas Investment Partners, said: “Having signed the Montreal Carbon Pledge earlier this year, adherence to the PDC is the logical next step for us.”

The separate Montreal Pledge was also launched in September 2014, at the PRI in Person event in the Canadian city. Overseen by the PRI, it aimed to attract commitment from portfolios totalling US$3trn in time for COP21. It has attracted just over US$8trn, according to the PRI.