Green policy failures are choking off billions in private investment

Fund managers are concerned that governments are not doing enough to mitigate effects of global warming

Environment Editor

A A A

Government policies to tackle climate change are so “inadequate and inconsistent” that jobs and pensions are being put at risk across the world, an influential group of investors has warned.

With global warming set to wreak  accelerating devastation on the global economy, the world’s biggest fund managers – who between them control $14trillion of investments in everything from wind turbines and agriculture to property and manufacturing – say they are considerably more worried about the issue than they were a year ago. They point to extreme weather events such as last year’s Superstorm Sandy in the US as evidence that  climate change is already upon us and are concerned that governments, including Britain’s, are not doing nearly enough to mitigate the effects.

Hundreds of billions of pounds  desperately needs to be spent in the coming years to keep the worst effects of climate change at bay, but without clear targets on renewable energy and global warming they are unwilling to invest their clients’ money.

“Despite overwhelming scientific evidence that human activity is warming the planet with increasingly serious economic consequences, policymakers have failed to act with the level of urgency and clarity the problem  requires,” said Stephanie Pfeifer, chief executive of the European Institutional Investors Group on Climate Change, part of a global coalition of pension funds, insurance companies and other financial institutions that are raising the alarm in a new report.

The group is calling on the UK to play a major role in dragging the world out of its torpor by leading the green policy debate in Europe.

It also wants the UK to play an active role in the run-up to a new international climate agreement due to be finalised in Paris next year, which will seek to forge a hugely ambitious, legally binding global treaty to limit global temperature rises to 2C above pre-industrial levels. Many of the investors are based in the UK and include the BT pension scheme, Aviva and Scottish Widows.

“If we don’t get [decisive action] then we won’t be able to shift investment from high-carbon to low-carbon projects and there will be severe impacts from climate change over the longer term,” Ms Pfeifer said.

Furthermore, the cost of extreme weather events like Sandy – which caused damage estimated at $60bn when it struck the north-eastern US in October – could deal a severe blow to the economy and, in turn, to pensions.Ms Pfeifer cited recent research which showed that in the UK, the offshore wind industry alone could miss out on 15,000 new jobs over the next seven years as a result of “weak and unclear signals” on renewable energy policy.

A spokesman for the Department for Business rejected claims that investors did not have the clarity they needed to make investment decisions on renewable energy. “We have provided clarity to offshore wind investors, setting out the support available under the Renewables Obligation [subsidy] and publishing strike prices [subsidy levels] earlier than expected,” he said.

Meanwhile, a UN report last year forecast that up to 60 million jobs could be created globally if the world switched decisively to a low-carbon economy.

The survey found institutions were unable to invest as much as they would like in projects to tackle global warming because they have a duty to maximise returns. Without clear green policies from the most influential governments, such investments become high risk.

Potential investors in UK renewable energy projects say they are being put off backing green power plants because a lack of policy clarity makes it difficult for them to determine their likely returns. Investment in British “clean energy” projects has tumbled from $4.2bn (£2.7bn) in July, August and September 2010 – the government’s first full quarter in office – to just $1.7bn in the most recent quarter, from the start of April to the end of June, according to Bloomberg.

The survey stopped short of singling out the UK government for giving a lack of clarity, saying that it was a Europewide and worldwide problem. But Ms Pfeifer conceded that “mixed messages are not helpful,” when asked about the current UK government’s record.

Some 69 per cent of fund managers surveyed said they were only appointing executives with a strong focus on climate change, a significant rise on a year ago. Meanwhile, 53 per cent of asset managers said they had either sold, or decided not to invest in, at least one company in the past year because of concerns about climate change, both moral and economic.

The survey included the views of 84 investment firms in 10 countries, including The Church Commissioners for England, BNP Paribas and the California Public Employees’ Retirement System.

PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Tradewind Recruitment: English Teacher

Negotiable: Tradewind Recruitment: My client is an excellent, large partially ...

Tradewind Recruitment: Science Teacher

£90 - £140 per day: Tradewind Recruitment: I am currently working in partnersh...

Tradewind Recruitment: Year 3 Primary Teacher

£100 - £150 per day: Tradewind Recruitment: Year 3 Teacher Birmingham Jan 2015...

Ashdown Group: Lead Web Developer (ASP.NET, C#) - City of London

£45000 - £50000 per annum + Excellent benefits: Ashdown Group: Lead Web Develo...

Day In a Page

Isis hostage crisis: The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power

Isis hostage crisis

The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power, says Robert Fisk
Missing salvage expert who found $50m of sunken treasure before disappearing, tracked down at last

The runaway buccaneers and the ship full of gold

Salvage expert Tommy Thompson found sunken treasure worth millions. Then he vanished... until now
Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Maverick artist Grayson Perry backs our campaign
Assisted Dying Bill: I want to be able to decide about my own death - I want to have control of my life

Assisted Dying Bill: 'I want control of my life'

This week the Assisted Dying Bill is debated in the Lords. Virginia Ironside, who has already made plans for her own self-deliverance, argues that it's time we allowed people a humane, compassionate death
Move over, kale - cabbage is the new rising star

Cabbage is king again

Sophie Morris banishes thoughts of soggy school dinners and turns over a new leaf
11 best winter skin treats

Give your moisturiser a helping hand: 11 best winter skin treats

Get an extra boost of nourishment from one of these hard-working products
Paul Scholes column: The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him

Paul Scholes column

The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him
Frank Warren column: No cigar, but pots of money: here come the Cubans

Frank Warren's Ringside

No cigar, but pots of money: here come the Cubans
Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee