Joining the call for G20 leadership on climate change

Rathbone Greenbank has joined 130 investors, pension funds and asset managers from around the world in writing to the leaders of the G20 nations to call for government leadership on the issue of climate change. This call comes ahead of September’s G20 summit in Hangzhou, China, where leaders from 20 major global economies will meet.

Representing over $13 trillion in combined assets under management, the signatories to this letter have sent a strong signal that we expect to see continued progress from governments and the private sector in achieving the goals of the Paris Agreement. Negotiated in December 2015, this is the first universal climate agreement in history - an ambitious accord which demonstrates that the global transition to a low-carbon economy is both essential and already underway.

The agreement will come into force once 55 nations accounting for over 55% of global carbon emissions have formally joined it. While a sufficient number of states have indicated their intention to ratify the agreement by the end of 2016, to date, only 23 nations representing just over 1% of global carbon emissions have actually done so. Investors are therefore calling on governments to ratify the Paris Agreement this year in order to ensure its early entry into force.

The letter also sets out a number of additional recommendations for governments, including the implementation of policies which promote global investment in clean energy, curb fossil fuel subsidies, and enhance disclosure requirements for companies on the subject of material climate change risks. Together, we believe these policy measures will catalyse private sector investment in low carbon solutions that support the goals of the Paris Agreement.

For many years, we’ve been active, both individually and as part of investor coalitions such as the Institutional Investors Group on Climate Change (IIGCC), in demonstrating a clear demand for action on climate change. We are supportive of the recommendations set out in this letter and are pleased that many align with the goals of our wide-ranging engagement programme.

For example, through our membership of the Aiming for A investor coalition, we’ve co-filed resolutions at the 2016 AGMs of Rio Tinto, Anglo American and Glencore calling for enhanced reporting of climate change risks. We also remain in active dialogue with BP and Royal Dutch Shell to ensure they meet the requirements of similar resolutions passed at their respective 2015 AGMs.

More broadly, we’ve engaged with the UK’s Financial Reporting Council to highlight investor concerns regarding inadequate company reporting of climate risk and, via our support for the Montréal Carbon Pledge, have committed to publicly reporting on the climate impacts of our clients’ investments.

Climate change presents a diverse range of risks that need to be managed by investors, but investing in businesses contributing to its prevention or mitigation can also offer opportunities. Through our ethical and sustainable investment services and active engagement programme, we remain committed to helping our clients shape the world’s low-carbon future.