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Senior executives from 21 sovereign wealth funds with more than $1 trillion in assets under management met this week at Commonwealth headquarters in London to discuss increasing investment to curb climate change.
The meeting was chaired by the Commonwealth Secretary-General, Patricia Scotland KC MP, and Lord Sarfraz, Co-Chair of the UK All-Party Parliamentary Group on Sovereign Wealth Funds. The high-level event was the first opportunity for sovereign wealth fund leaders to come together under the Commonwealth flag to share ideas on investing in clean energy.
Countries use sovereign wealth funds to invest in future generations, stabilize economies, and promote economic development. As long-term investors, they are well-positioned to fund clean energy and consider the effects of climate change on their portfolios. Because they are government-owned institutions, markets and other investors often look to the government for leadership.
At the beginning of the roundtable, the Secretary-General of the Federation stated:
“Today’s event is the starting point in our efforts to design programs with concrete and measurable outcomes that can accelerate investment in clean energy, especially in small island developing States.”
“The scale of the challenges we face demands the highest levels of energy, ambition and expertise. I have no doubt that the people gathered here have that energy, ambition and expertise in abundance. We believe there is no room and if we can find the best way to work together, we can make a real difference.”
Many participants at the meeting noted that there is currently a significant funding gap, with investment in clean energy currently falling below what is needed to meet the goals of the Paris Agreement, especially in developing countries.
Participants also noted that sovereign wealth funds have an important role to play in bridging this funding gap and are already making significant efforts. Set emissions reduction targets from your portfolio, co-invest in clean energy in developing countries, set internal carbon prices, work with high-emitting companies to reduce emissions, link employee pay and carbon reduction targets All of these methods were mentioned by the participants. Sovereign wealth fund to limit climate change.
Lord Sarfraz described the Commonwealth as a “really special platform” to advance work in this area. He said:
“All of these layers will be a huge resource for sovereign wealth funds, not just the general secretary’s influence over many heads of government, but also the layers below him, his cultural connections and business networks.”
During the deliberations, there was broad agreement that sovereign wealth funds could make a significant contribution to increasing investment in clean energy and reducing emissions. There was also consensus that the Federal Secretariat should undertake further work in this area.
The meeting was also attended by His Royal Highness the Duke of Gloucester, who is keenly interested in the role sovereign wealth funds can play in curbing climate change.
Media inquiries
- victoria holdsworth Head of Communications and Media Liaison, Federal Secretariat
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