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13 July 2015

G7 leaders’ commitments on climate change welcomed

USS has welcomed the recent G7 leaders’ declaration on climate change which include key commitments on reducing emissions and fossil fuel subsidies.

David Russell, Co-Head of Responsible Investment, USS Investment Management Ltd said:

“This is an encouraging signal ahead of the World Climate Summit (COP21) taking place in Paris this December that governments may be prepared to make some progressive international commitments on climate change.”

The G7 commitments, published on 8 June 2015, include:

  • Limiting emissions to hold global temperature increases to below 2° Celsius (global warming to date is already around 0.9°C).
  • 40 to 70% reductions in emissions by 2050 (when compared to 2010 levels).
  • Reaffirm the commitment to provide $100bn annually to fund the shift to a low carbon economy (by 2020).
  • Eliminate fossil fuel subsidies.

Ahead of the recent negotiations, USS alongside global investors representing over £7,622 billion assets under management, wrote an open letter to the G7 Finance Ministers calling for governments to set long term emission reduction goals and publish national action plans for reducing emissions. In doing so USS and its co-signatories hoped the G7 nations would send a signal to the market of their commitment to reduce emissions, thereby encouraging investment in the transition to a low carbon economy. This call for action built upon the 2014 global investor statement on climate change which set out the need for an ambitious global deal, carbon pricing and the phasing out of fossil fuel subsidies.

The open letter was co-convened by international investor groups focused on climate change, including the Institutional Investor Group on Climate Change (IIGCC) and the UN backed Principles for Responsible Investment, both of which USS is a founding member of. It was signed by 120 CEO’s from institutional investment firms around the world, including USS’s Group Chief Executive, Bill Galvin.

Further information on USS’s work on investment risk and climate change can be found on the USS website.