Investors worldwide are calling on governments to utilize every tool at their disposal—ranging from fiscal incentives to regulatory mandates—to ensure industries successfully transition to a clean energy future. As climate concerns intensify, the momentum among asset managers and owners is growing, with more joining global climate initiatives and committing to net-zero emissions targets. The result has been a surge in investments toward climate solutions, which hit a record $1.77 trillion in 2023.
Despite private sector leadership, the global effort to reduce emissions is falling short of the targets needed to limit global warming to within 1.5 degrees Celsius by 2030. Methane emissions continue to rise, and countries such as the U.S. are not on track to meet their 2030 goals under the Paris Agreement.
In response, investors are ramping up policy advocacy efforts, viewing government support as crucial to protecting long-term returns and unlocking the necessary climate solutions for a clean energy economy. The call for governmental action was a key theme at Climate Week NYC, and it will resonate again at COP29, where the world’s leading investors plan to press for more comprehensive policies.
New York State Comptroller Tom DiNapoli, who oversees the third-largest U.S. public pension fund, emphasized the importance of government action during Climate Week, saying, “Investors cannot change the climate equation alone. We need government support.”
DiNapoli is among over 500 investors managing more than $29 trillion in assets who have signed the 2024 Global Investor Statement to Governments on the Climate Crisis, urging world leaders to adopt comprehensive climate policies. These investors stress that private capital flows into climate solutions must increase to $4 trillion annually by 2030, more than triple current levels, to meet global climate goals.
In the U.S., the Inflation Reduction Act, the largest climate and clean energy legislation in history, has already stimulated billions in private clean energy investments. Every $1 of federal investment has unlocked $5.50 in private-sector funding. However, investors now seek assurances that such policies will remain intact to sustain momentum.
Key issues on the investor agenda include access to consistent climate risk data and mandatory climate disclosure laws, which have seen recent progress with new regulations in California and the U.S. Securities and Exchange Commission. Investors also want governments to update their Nationally Determined Contributions (NDCs) to align with the growing demand for climate transition action plans.
As Nigar Arpadarai, U.N. Climate Change High-Level Champion for COP29, noted, the 2024 Global Investor Statement adds investors’ “powerful voices” to the call for ambitious climate action. The statement will remain open until November 1, 2024, when it will be presented to world leaders at COP29, providing a clear message: governments must act decisively to drive the clean energy transition and secure long-term economic prosperity.