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.

Have you tried new the Independent Digital Edition apps?
News
Approved Food sell products past their sell-by dates at discounted prices
i100
Sport
Jonny Evans and Papiss Cisse come together
football
News
Life-changing: Simone de Beauvoir in 1947, two years before she wrote 'The Second Sex', credited as the starting point of second wave feminism
peopleHer seminal feminist polemic, The Second Sex, has been published in short-form to mark International Women's Day
News
i100
Arts and Entertainment
The beat is on: Alfred Doda, Gjevat Kelmendi and Orli Shuka in ‘Hyena’
filmReview: Hyena takes corruption and sleaziness to a truly epic level
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Ashdown Group: Senior VMware Platform Engineer - VMware / SAN / Tier3 DC

£45000 - £55000 per annum + benefits: Ashdown Group: Senior VMware Platform En...

Recruitment Genius: Purchasing Assistant

£10000 - £16000 per annum: Recruitment Genius: A distributor of specialist ele...

Recruitment Genius: Sales Ledger Assistant

£17000 - £19000 per annum: Recruitment Genius: A distributor of specialist ele...

Ashdown Group: Automated Tester / Test Analyst - .Net / SQL - Cheshire

£32000 per annum + pension, healthcare & 23 days holiday: Ashdown Group: A gro...

Day In a Page

Homeless Veterans campaign: Donations hit record-breaking £1m target after £300,000 gift from Lloyds Bank

Homeless Veterans campaign

Donations hit record-breaking £1m target after huge gift from Lloyds Bank
Flight MH370 a year on: Lost without a trace – but the search goes on

Lost without a trace

But, a year on, the search continues for Flight MH370
Germany's spymasters left red-faced after thieves break into brand new secret service HQ and steal taps

Germany's spy HQ springs a leak

Thieves break into new €1.5bn complex... to steal taps
International Women's Day 2015: Celebrating the whirlwind wit of Simone de Beauvoir

Whirlwind wit of Simone de Beauvoir

Simone de Beauvoir's seminal feminist polemic, 'The Second Sex', has been published in short-form for International Women's Day
Mark Zuckerberg’s hiring policy might suit him – but it wouldn’t work for me

Mark Zuckerberg’s hiring policy might suit him – but it wouldn’t work for me

Why would I want to employ someone I’d be happy to have as my boss, asks Simon Kelner
Confessions of a planespotter: With three Britons under arrest in the UAE, the perils have never been more apparent

Confessions of a planespotter

With three Britons under arrest in the UAE, the perils have never been more apparent. Sam Masters explains the appeal
Russia's gulag museum 'makes no mention' of Stalin's atrocities

Russia's gulag museum

Ministry of Culture-run site 'makes no mention' of Stalin's atrocities
The big fresh food con: Alarming truth behind the chocolate muffin that won't decay

The big fresh food con

Joanna Blythman reveals the alarming truth behind the chocolate muffin that won't decay
Virginia Ironside was my landlady: What is it like to live with an agony aunt on call 24/7?

Virginia Ironside was my landlady

Tim Willis reveals what it's like to live with an agony aunt on call 24/7
Paris Fashion Week 2015: The wit and wisdom of Manish Arora's exercise in high camp

Paris Fashion Week 2015

The wit and wisdom of Manish Arora's exercise in high camp
8 best workout DVDs

8 best workout DVDs

If your 'New Year new you' regime hasn’t lasted beyond February, why not try working out from home?
Frank Warren column: Amir Khan ready to meet winner of Floyd Mayweather v Manny Pacquiao

Khan ready to meet winner of Mayweather v Pacquiao

The Bolton fighter is unlikely to take on Kell Brook with two superstar opponents on the horizon, says Frank Warren
War with Isis: Iraq's government fights to win back Tikrit from militants - but then what?

Baghdad fights to win back Tikrit from Isis – but then what?

Patrick Cockburn reports from Kirkuk on a conflict which sectarianism has made intractable
Living with Alzheimer's: What is it really like to be diagnosed with early-onset dementia?

What is it like to live with Alzheimer's?

Depicting early-onset Alzheimer's, the film 'Still Alice' had a profound effect on Joy Watson, who lives with the illness. She tells Kate Hilpern how she's coped with the diagnosis
The Internet of Things: Meet the British salesman who gave real-world items a virtual life

Setting in motion the Internet of Things

British salesman Kevin Ashton gave real-world items a virtual life