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New report: Lack of green investments puts Paris agreement at risk

[A] new Swedwatch report shows that Sweden’s ten largest fund management companies are not contributing to the fulfillment of goals of the Paris agreement... [It] shows that:

  • The urgent need for concrete climate transition results, the ambitions and actions of the fund management companies are not sufficient.
  • The investors included in the study have not set any targets for reallocation of capital from investments in fossil production to investments in green finance and climate solutions for mitigation and adaptation.
  • Across the board, climate solutions are almost exclusively found in niche funds, which make up only a fraction of the total investments. Some investors deferred responsibility for choosing to invest in climate solutions to clients.

The fund management companies explain that one reason for not reallocating substantial capital is that climate risks are largely ignored in today’s short-term financial markets. Further, they refer to a current lack of green projects and climate solutions to invest in. They also describe that the fact that portfolio companies are not measuring and reporting their own climate impacts is a challenge for the sector.

However, in order to contribute effectively to the swift climate transition needed by 2020 [...] it is not an option for investors to wait for improved company reporting and substantially increased client demand for green, climate-solution focused savings products.

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