23 September 2014: A group of institutional investors have partnered with the UN Environment Programme (UNEP) and its Finance Initiative (UNEP FI) to decarbonize US$100 billion of institutional investment.

The Portfolio Decarbonization Coalition (PDC), which was announced during the UN Climate Summit, will bring together investors committed to measuring and disclosing the carbon footprint (or carbon intensity of capital) of at least US$500 billion of investment by December 2015, and decarbonizing portfolios worth at least US$100 billion. Investors can decarbonize their portfolios by withdrawing capital from carbon-intensive companies, projects and technologies in each sector, and reinvesting that capital into carbon-efficient companies, projects and technologies.

Co-founded by UNEP and UNEP FI, the Fourth Swedish National Pension Fund (AP4), Amundi and the Carbon Disclosure Project (CDP), the PDC is also supported by the China International Capital Corporation.

Mats Andersson, AP4 CEO, underlined that, as climate change is becoming more recognized as a financial risk, it is “our duty, as trustees, to take concrete steps to reduce this risk.” Achim Steiner, UNEP Executive Director, stated that institutional investors have consistently advocated for ambitious climate change policies, and that the PDC now enables those investors to take concerted and ambitious action themselves, through their own portfolios.

The PDC will establish an operations unit that will initially be housed at UNEP to undertake a variety of efforts to achieve these targets, including: implementing communication and outreach campaigns to secure investor commitments on determining carbon footprint and/or portfolio decarbonization; undertaking research and analysis to resolve emerging questions; assisting members and interested institutions in meeting commitments; and engaging with governments on financial regulatory components of these concepts for discussion in the lead up to COP 21 in Paris in 2015.

UNEP FI is a global partnership between UNEP and the financial sector, with over 230 institutions, including banks, insurers and fund managers, working with UNEP to better understand the impacts of environmental and social considerations on financial performance. Through its Climate Change Advisory Group (CCAG), UNEP FI works to identify the roles, potential and needs of the finance sector in addressing climate change, and to integrate climate change considerations into financial decisions. [UNEP Press Release] [PDC Brochure]