Published on 09 July 2018

SUSTAINABLE FINANCE

Six sovereign funds want to commit for climate

On July the 6th, the President of the Republic Emmanuel Macron has gathered at the Elysee six behemoths of global finance: the sovereign wealth funds of Norway, New Zealand, Qatar, Saudi Arabia, Kuwait, and the United Arab Emirates. Together, they weigh 3 trillion dollars (about 2,600 billion euros). And they decided to engage in the fight against climate change.

Fonds souverains Macron Elysee
Six sovereign wealth funds gathered at the Élysée on climate finance.
@Elysee

Six sovereign wealth funds together weighing more than $ 3 trillion (Norway, New Zealand, Qatar, Saudi Arabia, Kuwait, United Arab Emirates), gathered Friday in Paris, have decided to commit to the fight against climate change, announced Emmanuel Macron. In a charter issued Friday, July 6, these heavyweights in global finance, fueled mainly by oil and gas revenues in their country, pledge to encourage the companies in which they invest to integrate the risk of climate change and submit proposals. public data on their low carbon strategy.

They also decided to "allocate a portion of the allocation of their funds to green investments," welcomed the head of state, without quoting commitment quantified, at a press conference alongside Norwegian Prime Minister Erna Solberg and Saudi Fund Manager Yasir Al Rumayyan. Their joint commitment is part of the "One Planet Summit" of 12 December, which aimed to mobilize the private sector for the climate, especially the financial sector. Emmanuel Macron took the initiative to organize this summit after the withdrawal of the United States from the Paris agreement on the climate.

"If finance remains focused on short-term speculation, with too much concentration of profits, it will die, and if the economy is still based on fossil fuels, we will die." "Through this initiative, we are driving the economy towards This is why finance was invented, here we are rebuilding finance because we are rebuilding trust and that common goal, "said Emmanuel Macron.

"These investments make commercial sense for the funds, which was not the case ten or twenty years ago, for example Saudi Arabia will invest to create 200 GW of solar energy by 2030. That's If it makes sense commercially, it will be sustainable and it will work, while public policies that do not make commercial sense do not work, "added Yasir Al Rumayyan.

Integrate climate risk

The managers of the six sovereign wealth funds were present at the Elysee Palace: Yngve Slyngstad, head of the Norwegian fund ($ 1 trillion), Khalil Foulathi, fund manager of Abu Dhabi (around $ 828 billion), Farouk Bastak for Kuwait (524 billion), Yasir Al Rumayyan for the Saudi fund (494 billion), Sheikh Abdulla bin Mohammed bin Saud Al-Thani for that of Qatar (320 billion) and Matt Whineray for the New Zealand fund (20 billion). For now, no Chinese fund has joined this initiative.

The six funds note together that "the transition to a low carbon economy creates new investment opportunities," says the charter. They want to define the framework of common methods before the end of the year to "help investors to integrate climate risk and thus influence the trajectory of the global economy towards sustainable growth, avoiding catastrophic risks for the planet".

The work of sovereign wealth funds should join those of the G20 corporate climate report task force chaired by Michael Bloomberg. By the end of 2016, it had already proposed harmonizing corporate climate reporting. This charter of good conduct, which wants to create a ripple effect in global finance, is open to major investors. "I will organize the next edition of the One Planet Summit in New York on September 26 (in parallel with the United Nations General Assembly, ndr)", concluded Emmanuel Macron.

Ludovic Dupin with AFP


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