A letter co-signed by 130 global institutions that control $13 trillion in investments has been sent to G20 heads of government urging them to act fast on ratifying the Paris Agreement signed after last years COP21 summit.
Ahead of a G20 meeting in September, the consortium of institutions has said that those nations that ratify the terms of the Paris Agreement sooner would benefit from better policy certainty and thus attract more investment in renewable energy industries and technologies.
The letter asks for these leading nations to adopt strong carbon pricing and develop clear and consistent regulations designed to encourage the uptake of renewable energy and energy efficiency. G20 nations must also work on plans to phase out fossil fuels in order to expedite the transition to a low carbon economy, the letter said.
"The Paris Agreement on climate change provides a clear signal to investors that the transition to the low carbon, clean energy economy is inevitable and already under way," said the letter. "Governments have a responsibility to work with the private sector to ensure that this transition happens fast enough to catalyze the significant investment required to achieve the Paris Agreements goals."
The Investor Group on Climate Change (IGCC) is one of six organizations that represent the 130 institutions that co-signed the letter, and its chief executive Emma Herd said that quick action on ratifying the Agreement would help investors assess climate-related risks.
"Investors are asking companies: tells us what the implementation of the Paris Agreement means for your business so that we can price that risk accordingly." She said, adding that the G20 nations are "highly influential" in influencing investors financing decisions, particularly on matters related to climate change.
"If all G20 nations did ratify Paris," Herd said, "it would go a long way towards full implementation of the terms agreed." China is currently at the helm of the G20, and when the leaders meet on September 4 & 5 there is expected to be a strong focus on climate-related issues and the establishment of a green finance study group.
In 2017, Germany will take over leadership of the G20, and the investor group has already called on the nation to continue the focus on tackling the issues of climate change.