To initiate the transition, six sovereign funds are involved in rebuilding global finance around the objectives of the Paris Agreement. The funds are responsible for national savings and encourage investors to take into account the climate risk and, in doing so, alter the trend of the global economy towards sustainable growth.

 

6

Sovereign Wealth Funds engaged who collectively manage over $3 trillion in assets

Announcements

  • Establishment of the Sovereign Wealth Fund (SWF) working group to accelerate efforts to integrate financial risks and opportunities related to climate change in the management of large, long term asset pools
  • 6 funds: Abu Dhabi Investment Authority, Kuweit Investment Authority, Norges Bank Investment Management, the Public Investment Fund of the Kingdom of Saudi Arabia, the Qatar Investment Authority (5 of the largest SWFs in the world) and the New Zealand Superannuation fund (chair)

Accomplishments

On 6th July 2018, publication of the One Planet Sovereign Wealth Funds Framework, aimed at helping SWFs to :

  • Foster a shared understanding of key principles, methodologies and indicators related to climate change.
  • Identify climate-related risks and opportunities in their investments.
  • Enhance their investment decision-making frameworks to better inform their priorities as investors and participants in financial markets.
  • 3 principles recognized by th SWF working group: alignment of investment policies with climate change considerations ; ownership, by encouraging investee companies to address material climate change issues ; integration of climate change related risks and opportunities.

Next steps

  • Work with the International Forum of Sovereign Wealth Funds and other cooperative platforms for asset owners to exchange and advance best practices on climate issues
  • Having other long-term institutional inestors make use of the Framework in the execution of their mandates
By using the Framework, SWF can reinforce their long-term value creation, improve their risk-return profile, and increase long-term portfolio resilience by factoring and integrating climate issues into their decision-making.

The six founding members of the SWF working group