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Responsible investing and the importance of addressing climate change

Responsible investing and the importance of addressing climate change

BY ANDREW NAYLOR, DIRECTOR, CENTRAL BANKS AND PUBLIC POLICY, WORLD GOLD COUNCIL

Climate change is a critical global issue. It is a regular  xture on the agenda of the G20, the Financial Stability Board, and the United Nations.

Governments, businesses and investors all recognise the need to take action. Under the auspices of the United Nations Framework Convention on Climate Change (UNFCCC), the 2016 Paris Agreement saw almost 200 governments commit to mitigate the impact of greenhouse gas emissions and climate change.

More recently, the United Nations Intergovernmental Panel on Climate Change (IPCC) warned that tougher targets are required to avert significantly higher risks of extreme weather patterns, rising sea levels, and the catastrophic disruption of ecological systems and food production that climate change will bring.

Australia is taking a lead with more than half of professionally managed  financial assets having a ‘responsible’ mandate. In its Responsible Investment Benchmark Report 2018, the Responsible Investment Association of Australasia estimates that the assets under management of responsible investments in Australia is now $866 billion. Investors are taking a keen interest in both how businesses are reducing their carbon footprints and how climate change will a ect business operations in the future.

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