29 September 2014: The Principles for Responsible Investment (PRI) and a group of major institutional investors have launched a commitment to measure and disclose annually the carbon footprint of their investment portfolios. The first group of investors signing the ‘Montreal Carbon Pledge’ represents a portfolio of over US$500 billion, and the UN-supported PRI aims to attract a total commitment of US$3 trillion by December 2015.

Launched on 25 September 2014, at the PRI Conference in Montreal, Canada, the Pledge also allows asset owners and investment managers to formalize their commitment to the goals of the ‘Portfolio Decarbonization Coalition,’ co-founded by PRI and the UN Environment Programme Finance Initiative (UNEP-FI), announced at the UN Climate Summit in New York, US. The Coalition will aim to substantially reduce the carbon footprint of hundreds of billions of US dollars of institutional investment globally by the 2015 UN Climate Change Conference, held in Paris, France.

Measuring the carbon footprint of investments enables investors to quantify the carbon content of a portfolio. At present, 78% of the largest 500 publicly listed companies report their carbon dioxide emissions. Speaking at the launch, PRI Managing Direcor Fiona Reynolds described the Pledge as “a commitment by investors to translate climate talk into walk” and described “carbon footprinting” as “the first step to managing the long-term investment risks associated with climate change and carbon regulation.”

The PRI will manage an online portal where interested investors can endorse the Pledge and report the size of their portfolio carbon footprint commitment, as well as possible associated reduction targets.

Speaking on the role of investors in the run-up to the 2015 UN Climate Change Conference, UNFCCC Executive Secretary Christiana Figueres stressed the urgent need for having a regulatory framework for the next 30-50 years in place by December 2015. She added that, “If we do not do this in Paris, I guarantee you it will take not five years but ten to rally the political will around the table again to come to another agreement.” Figueres also underlined that “By 2025, it will be too late to keep us under two degrees” and noted the costs of delaying action on climate change.

The PRI, an international network of investors, promotes the implementation of six voluntary Principles for Responsible Investment. The 2014 PRI conference, comprising the ‘PRI in Person’ global responsible investment conference and the ‘PRI Academic Network’ conference, was held from 22-26 September 2014. The PRI in Person conference, which addressed topics including fossil fuel divestment, green bonds and hydraulic fracturing, attracted over 600 investors, academics and corporate participants. [PRI Press Release] [UNEP Press Release] [UNFCCC Press Release] [PRI Conference Website] [The Montreal Carbon Pledge Website] [IISD RS Story on the Launch of the Decarbonization Coalition] [IISD RS Coverage of the UN Climate Summit]