An international pension fund coalition - co-founded by a UN agency last September - wants to shift at least USD600 billion of other people’s money out of fossil fuels and into renewable energy projects.
But it will do so only if governments establish ‘legal frameworks to protect long-term investors’ and ensure ‘capital reallocation’ is risk-free – that is, underwritten by taxpayers – in perpetuity. Nice work if you can get it.
The United Nations Framework Convention on Climate Change (UNFCCC) was not the only agency excited by the 21st annual Conference of the Parties (COP). Another group ecstatic about the prospect of a ‘low-carbon’ world was the United Nations Environmental Programme (UNEP), the 43-year old brainchild of the late Maurice Strong.
Strong, who passed away at 86, just two days before COP21 began in Paris, was a UNEP founding Executive Director. Achim Steiner, UNEP’s current Under-Secretary General and Executive Director – and a past Director General of the International Union for Conservation of Nature - described him as one of the world's greats, ‘a visionary and a pioneer of global sustainable development’.
Strong would have been pleased with UNEP’s Finance Initiative. Launched in 1991, UNEP FI describes itself as a ‘global partnership with the financial sector’. Its mission: to persuade banks, insurers and fund managers to recognise the ‘impacts of environmental and social considerations on financial performance.’ Over 200 members, have signed an FI Statement of Commitment. Its recent activities, however, arguably go beyond this broad objective into new and more intriguing territory.
In the weird world of environmental politics, the UN sees no conflict of interest in one powerful entity and its agencies being responsible for collecting data, concocting ‘projections’ and ‘storylines’, developing policy while – as we shall see – simultaneously funding and encouraging advocacy groups to pressure governments; in this case to design or modify renewable energy (RE) and carbon pricing regulations in its favour. Why not? Well, the ultimate beneficiaries are humankind and the planet – not just huge ticket-clipping pension funds, some with significant RE sector exposure, and career climate-bureaucrats.
Conflict of interest: A situation that has the potential to undermine an agency’s or person’s impartiality because there is the possibility of a clash between self-interest, professional interest or public interest.
An entity that has procured (allegedly) the ‘best available science’ and claims the power to induce a global Goldilocks climate – one protected by legal immunity under the 1946 Convention on the Privileges and Immunities of the United Nations – surely should be allowed to get on with it?
But consider another context, - say an intelligence agency – where no genuine separation exists between intelligence assessment and policy formulation, or between intelligence collection and assessment. Imagine the kerfuffle if, hypothetically, this agency engaged – or ‘co-partnered’ with – advocacy groups to promote the agency’s worldview about planetary ‘security’.
Consider now the UN’s Portfolio Decarbonisation Initiative. Launched at Secretary-General Ban Ki-moon’s Climate Summit in September 2014, it was co-founded by UNEP FI, the fourth National pension fund of Sweden, AP4, Europe’s largest asset manager Amundi, and CDP, an international not-for-profit organization reportedly holding the ‘largest global collection of corporate environmental data.’
At the beginning of COP21 week-two, the Portfolio Decarbonisation Coalition - also co-founded by UNEP FI with a mission to mobilise ‘financial markets to drive economic decarbonisation’ - issued a media release designed to ‘send a strong signal to world governments gathered in Paris to negotiate a new global treaty on climate change.’
Two of the world’s largest institutional investors, Allianz and ABP, would be joining PDC. If governments were prepared to play their part, the Coalition could decarbonise at least USD600bn of assets-under-management (AUM), six times an earlier target. (Decarbonisation strategies of its 25 members – which include the University of Sydney and Church of Sweden – are in PDC’s first annual report.)
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