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By Reed MontagueESG Research Analyst, Calvert Research and Management

Washington - The 2021 Global Investor Statement to Governments on the Climate Crisis calls on governments to implement meaningful policies to support investment in solutions to the climate crisis. It lays out a five-point plan designed to reduce global net carbon dioxide emissions by 45 percent from 2010 levels by 2030, a key step to reaching net-zero emissions by 2050 or sooner. The statement has been signed by 587 investors representing over $46 trillion in assets and collectively represent 40 percent of the world's assets under management. Released ahead of the United Nations Climate Change Conference in Glasgow in November 2021 (COP26), the statement seeks to enhance investor voices to encourage governments to develop the essential policy framework for investors to manage climate risk.

Further, the statement urges governments to raise their climate ambitions through the following specific actions:

  • Commit to limit warming to 1.5 degrees Celsius and ensure a planned transition to net-zero emissions by 2050 or earlier.
  • Commit to a domestic net-zero emissions target by 2050 or sooner and develop a pathway with interim targets along the way, including clear decarburization road maps for the carbon intensive sectors.
  • Implement domestic policies to ensure successful delivery of such targets, incentivize private investments in zero-emissions solutions and support pre-2030 actions via steps such as robust carbon pricing, elimination of fossil fuel subsidies by set deadlines, phaseout of coal-based electricity generation by setting deadlines aligned with 1.5 degrees Celsius temperature pathways, avoid new carbon-intensive infrastructure and develop just transition plans for affected workers and communities.
  • Have COVID-19 economic recovery plans support the transition to net-zero emissions and enhance resilience.
  • Implement mandatory climate risk disclosure requirements aligned with TCFD recommendations, ensuring that disclosures are comprehensive, consistent, comparable and useful.

Calvert is proud to be one of the signatories of the 2021 Global Investor Statement. We support the policy recommendations it makes, which are necessary to address climate risk and ensure the channeling of the assets necessary to tackle the climate crisis. We stand in unison with other global investors in calling for more ambitious policies from national governments ahead of COP26 that address the climate crisis. We have long worked closely with some of the founding partners of the Investor Agenda, including Ceres, CDP, the Principles for Responsible Investment and United Nations Environment Programme Finance Initiative on climate change and various other issues. The Investor Agenda, which developed the Investor Statement, offers a common leadership agenda on the climate crisis and focuses on accelerating investor action toward a net-zero emissions economy. The Investor Agenda also manages the Net Zero Asset Managers initiative, to which we were one of the founding 30 signatories when the initiative launched in December 2020.

Calvert believes that if countries can implement the actions required to uphold the Paris Agreement's goals, this will likely lead to significant investment opportunities in clean technologies, green infrastructure and other necessary assets, products and services. As the countdown to COP26 begins, we are closely watching for the tangible policy outcomes and the overarching policy signals that will define climate risks and opportunities for investors in the decade to come.

Bottom line: As an investor, directing capital and engaging with issuers to support the net-zero transition and the adoption of commitments toward carbon reduction supports a climate resilient and prosperous future.