g20International efforts to begin addressing the looming threat posed by climate change culminated in last year’s Paris Agreement, the first of its kind. Although the agreement is historic, a lack of an enforcement mechanism for countries who do not meet their nationally determined goals for greenhouse gas emission reduction means that the true effect of the accord will depend on the commitment, diligence, and stringency with which countries implement it. This is particularly true for the largest emitters—China and the United States.

Some of the Paris Agreement’s primary goals are 1) to keep global temperature at a minimum of 2°C above the pre-industrial average, with 1.5°C as a target, and 2) to reach “net zero greenhouse gas emissions…in the second half of the century.” These goals are unattainable without significant cooperation between the public and private sectors and concerted effort by governments to strengthen support via policy and national regulation. As G20 leaders met in China this past weekend, Friends Fiduciary joined 129 other investors (with combined assets under management of over USD 13 trillion) in calling for leaders to ensure they are well-positioned to maximize private sector partnership as global temperature increases alter the shape and scale of world economies.

As the letter outlines, significant national policy support for private sector investment in addition to nationally-determined contributions is necessary to stay within the goal of no more than a 2°C maximum temperature increase. In order to maximize the benefits of private sector investment in low-emission initiatives, world leaders need to ratify the Paris Agreement as soon as possible, develop national financial regulation of corporate climate disclosure, reduce and move towards elimination of fossil fuel subsidies, and “support a doubling of global investment in clean energy by 2020.” Friends Fiduciary believes these actions are necessary to mitigate the more extreme impacts of climate change and support more sustainable world economies.

Please click here to view letter.