Eight asset owners have written to Prime Minister Boris Johnson and other ministers to offer their help in determining how the financial sector can contribute to the U.K.'s efforts to shift to a net-zero economy.
Signatories represent more than £230 billion ($314.7 billion) in assets and were brought together by the U.N.-supported Principles for Responsible Investment.
"Climate change is recognised as the most significant global risk facing investors," the letter said. "For our beneficiaries, it threatens their livelihoods, their retirement savings, their health, their quality of life. Even a short delay in implementing the necessary policies increases the likelihood of a disorderly transition, threatening beneficiaries' savings and the resilience of the financial system."
The U.K. recently announced it was aiming for a 68% reduction in greenhouse gas emissions by 2030. It also set out a 10-point plan for a "green industrial revolution," moving the U.K. economy toward net zero by 2050.
"Further detail on how this will be undertaken will be needed, as well as substantially more funding to match the scale of the transformation required," the letter said.
The asset owners also said the U.K.'s domestic net-zero strategy — which will be published this year — needs to address the sustainable land-use challenges that the U.K. faces, including meeting afforestation targets and peat-land restoration. Improving the energy efficiency of buildings should also be made a priority.
"With public budgets under continued strain from the COVID-19 crisis, now is the time to utilise the City of London and private finance to help deliver the ambitious decarbonisation needed," the letter said. This can be done by ensuring the U.K.'s new National Infrastructure Bank has a clear net-zero and resilience mandate or by co-designing dedicated investment strategies, such as the Charging Infrastructure Investment Fund. The CIIF, managed by Zouk Capital, is a partnership between the government and the private sector aimed at increasing the use of electric vehicles.
"We understand that there are huge pressures on your diary, but we would be delighted to meet with you to see how we can work together to deliver successful outcomes ahead of COP 26," the United Nations climate-change conference taking place in the U.K. later this year.
The letter to Prime Minister Boris Johnson was also addressed to Rishi Sunak, chancellor of the exchequer; Kwasi Kwarteng, secretary of state for the Department of Business, Energy and Industrial Strategy; and Alok Sharma, president for COP26.
A separate letter by the asset owners, included with the first letter and addressed to Grant Shapps, secretary of state for transport, called on the government to implement an early phaseout date for internal combustion engine vehicles.
The group welcomed the U.K.'s commitment to a sales ban on gas and diesel cars by 2030, but said more needs to be done to facilitate this. Recommendations include expanding infrastructure for the charging of electric vehicles.
The signatories were Rachel Elwell, CEO at Border to Coast Pensions Partnership, Leeds; Laura Chappell, CEO at Brunel Pension Partnership, Bristol; Morten Nilsson, CEO at BT Pension Scheme Management, London; Mike Weston, CEO at LGPS Central, Wolverhampton; Chris Rule, CEO at Local Pensions Partnership Investments, London; David Murphy, CEO and secretary at Northern Ireland Local Government Officers' Superannuation Committee, Belfast; John Chilman, CEO at RPMI, London; and Eve Keith, secretary to the trustees at the UNISON Staff Pension Scheme, London.
