Biggest EU investors are partly aligned with Paris Agreement, but more efforts needed

05 July 2017
by WWF -- last modified 05 July 2017

The EU's biggest investors are partly aligned with the Paris agreement's climate target of keeping global warming well under 2°C but still invest too much in coal, the first ever such analysis, carried out by WWF, shows.

Lack of disclosure on climate risk remains an element of concern that will have to be addressed by the upcoming G20 Summit in Hamburg, and by the EU.

WWF's report shows that 30 of Europe's major asset owners, mainly pension funds, from the Netherlands, Denmark, Sweden, Norway and Finland have already implemented changes to bring their public equity portfolio more in line with the well under 2°C climate goal. Almost all of them have cut funding to coal mining; however many of them are investing too much in coal power and still lagging behind on renewable power.

"Ensuring capital is invested in companies that contribute to a climate-safe future is key to reaching the Paris Agreement targets, reducing climate-related financial risks and maximising returns. Some asset owners are showing leadership, but more needs to be done to reallocate investments from coal to renewable power," commented Sebastien Godinot, Economist at WWF European Policy Office.

WWF has contacted 80 of Europe's largest asset owners representing USD 13 trillion (EUR 11.6 tn) in total assets, but only 30, worth USD 2.5 trillion (EUR 0.89 tn) have agreed to disclose their data so far. More efforts will be needed to improve the lack of disclosure of holdings data, in part due to a current lack of regulation requiring so in some countries.

"Too many asset owners are still not disclosing how their capital investments are aligned with the Paris Agreement. We call on the G20 leaders meeting soon in Hamburg to improve this, by adopting the recommendations on climate-related disclosures of the designated Financial Stability Board's Task Force. These will have to be made mandatory by the EU and member states across the Union and nationally - a crucial move towards making climate alignment assessments by investors the norm," added Godinot.

The European Policy Office helps shape EU policies that impact on the European and global environment.

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