G20 Financial Reform Agenda a Barrier to Climate Change Investments

The green economy could be given US$301 billion boost from pension funds alone, according to new analysis from international unions, if barriers to investment are overcome.

The International Trade Union Confederation (ITUC) is calling for an investment of 5% of pension fund portfolios in green investments by 2015, split across three asset classes to respect pension fund diversification rules.

Pension funds currently contribute around 0.3 – 0.5% of portfolios to clean energy infrastructure.

Sharan Burrow, ITUC General Secretary, said the low level of portfolio holdings in longer-term green economy investments is a critical concern to workers.

“We need 50% more food, 45% more energy and 30% more water by 2050. There is a both an imperative and an opportunity to invest in the green economy to create sustainable decent jobs.

“Not enough money is being invested in emission reduction and adaptation policies. While governments and other financial institutions should take the lead – the pension fund industry can play a key role,” said Sharan Burrow.

Barriers to climate change investment come from the limited availability of climate change investment products and the post-G20 G20 The Group of Twenty, or G20, is a forum for international cooperation on the most important aspects of the international economic and financial agenda. It brings together 19 countries and the European Union, which together represent around 90% of global GDP, 80% of global trade and two thirds of the world’s population. financial reform agenda.

“The post-G20 G20 The Group of Twenty, or G20, is a forum for international cooperation on the most important aspects of the international economic and financial agenda. It brings together 19 countries and the European Union, which together represent around 90% of global GDP, 80% of global trade and two thirds of the world’s population. financial reform agenda has been designed in a way that does not sufficiently take on board climate-change financing priorities, and could slow the flow of green debt and equity financing.
“While the size of the bond markets is US$ 95000 billion, the size of green bonds is only US$ 15.6 billion.

“Working people have a stake in the success of their pension funds – to create jobs, to provide a secure retirement income for working people and to sustain our planet,” said Sharan Burrow.

The ITUC – TUAC report, “What role for pension funds in financing climate change policies?” is available here