The world is facing an economic crash “three or four times” the scale of the 2008 financial crisis unless more is done to tackle climate change, Schroders has warned.
The asset management company said failure to step up climate action would lead to temperature rises of around 4˚C and $23trn (£18trn) in global economic losses over the next 80 years.
Schroders is just one of 415 investors to have signed a statement today calling on leaders at the UN’s Cop 24 climate summit in Poland to show greater ambition tackling climate change.
The investor group, which manages over $32trn in assets, asked governments to strengthen their nationally determined contributions (NDCs), put a meaningful price on carbon, and phase out fossil fuel subsidies.
“The full implementation of current NDCs would lead to an unacceptably high temperature increase that would cause substantial negative economic impacts,” the statement says.
“It is vital for our long-term planning and asset allocation decisions that governments work closely with investors to incorporate Paris-aligned climate scenarios into their policy frameworks and energy transition pathways.”
The investor group includes some of the world’s largest pension funds, asset managers and insurance companies, along with faith-based groups, state treasurers and venture capital funds.
It has also called on governments to publically support the adoption of recommendations by the Task Force on Climate-related Financial Disclosures (TCFD).
However, the investors warned that it would be important for all workers and communities to share the benefits of cleaner energy sources, ensuring all affected by the transition are supported.
The intervention comes after a UN report warned last month that nations must triple their emission cuts to meet the Paris Agreement and keep global warming below 2˚C.
New York State Comptroller, Thomas P. DiNapoli, responsible for a $207bn pension fund said: “Despite the misguided policies of the Trump administration, global efforts to address climate risk are ongoing.
“The transition to a low-carbon economy presents numerous opportunities to create value, and investors who ignore the changing world do so at their own peril.”
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