The richest nations of the world should ensure that their coronavirus or COVID-19 recovery plans are sustainable and help meeting the goals of the Paris climate accord, as per leading global investor groups that together manage the trillions of dollars in assets.
While some members of the world's 20 biggest economies such as Britain, France and Germany have made statements about doing just that, some of the biggest emitters such as China and the United States have yet to do so. The intervention comes as more governments start to plan for the lifting of lockdown restrictions that have cratered the revenues of companies from airlines to retailers and radically changed the economics of the energy sector.
Groups said private capital would play a key role in the recovery
The groups said private capital would play a key role in the recovery, but investors needed long-term policies to be put in place that reflected the agreed move to a low-carbon economy. "Recovery plans that exacerbate climate change would expose investors and national economies to escalating financial, health and social risks in the coming years," they said in a statement said on Monday.
"Governments should avoid the prioritisation of risky, short-term emissions-intensive projects," added the groups, which include the Institutional Investor Group on Climate Change, members of which include BlackRock. Recovery money would be best spent on creating jobs and sustainable infrastructure that helped meet the goal of net zero carbon emissions across sectors including energy, industrials, building and transport, they said.
Also signing the statement, under the collective group known as the Investor Agenda, were the United Nations-backed Principles for Responsible Investment, Ceres, CDP, Investor Group on Climate Change, Asia Investor Group on Climate Change and the UNEP Finance Initiative. The statement follows similar calls for a green recovery in recent days from International Monetary Fund Managing Director Kristalina Georgieva and German Chancellor Angela Merkel, among others.
UN Secretary-General Antonio Guterres last week urged the G20 to do more calling for "brave, visionary and collaborative leadership" to use COVID-19 relief money to accelerate the decarbonisation of the world economy. The G20 collectively accounted for more than 80% of global emissions and over 85 percent of the global economy, and without a contribution by the biggest emitters, global efforts risked being doomed to failure, he said.
The deadly virus outbreak has created a major stir around the world in recent times claiming the lives of more than 250,000 people globally and infected over 3.5 million people worldwide. The virus outbreak has been described by the WHO as a pandemic.
(With agency inputs)