The Paris climate agreement has been hailed for recognising the role institutional investors will play in meeting new carbon emission targets and keeping climate change below 2 degrees of warming.
Fiona Reynolds, managing director of the Principles for Responsible Investment (PRI), described the agreement between nearly 200 governments around the world as the turning point investors have been seeking.
“We welcome the recognition of the role of private finance in achieving a low carbon transition and emissions reduction goals,” said Reynolds.
She said investors were already taking action to measure their carbon exposure through the Montreal Carbon Pledge and to decarbonise their portfolios.
Leading PRI signatories are engaging with companies on business planning around the transition to a low carbon economy, future investment opportunities and full transparency around political and climate lobbying activities.
The PRI has launched a Green Infrastructure Investment Coalition at the UN climate change conference in Paris, to mobilise capital to meet the growing need for climate resilient infrastructure development that supports intended nationally determined contributions and global targets.
The Institute for Energy Economics and Financial Analysis (IEEFA) has tracked the impact of the Paris agreement and its impact on the value of mining and energy company stocks.
It notes that shares in Anglo-American shares were down 22 per cent in the past week, down 36 per cent in a month and 73 per cent in just one year. Over the same time periods Glencore shares fell 4 per cent, 8 per cent and 70 per cent; BHP shares fell 1 per cent, 15 per cent and 35 per cent; and RIO Tinto fell 3 per cent, 11 per cent and 20 per cent.
Tim Buckley, IEEFA’s director of energy finance studies, Australasia, said: “Recently released Barclays figures indicate that the Paris accord will reduce fossil fuel revenue by 25 per cent over the next 30 years and shift something like $40 trillion of capital to energy efficiency and renewables over the next 30 years.