Portfolio Decarbonization Coalition
|Name of initiative||Portfolio Decarbonization Coalition|
|Secretariat||Kai Remco FISCHER, UNEP Finance Initiative, based in Geneva Switzerland; e-mail: Remco.FISCHER@unep.org|
|Name of lead organisation||UNEP Finance Initiative|
|Type of lead organisation||International organisation|
|Location/Nationality of lead organisation||Switzerland|
|Description||The Portfolio Decarbonization Coalition (PDC) is a multi-stakeholder initiative that will drive GHG emissions reductions on the ground by mobilizing a critical mass of institutional investors committed to gradually decarbonizing their portfolios.|
|Objectives|| Between September 2014 and COP21 the PDC will build a community of institutional investors measuring and disclosing the carbon footprint of a total of at least USD 500bn of assets under management (AUM).
Between September 2014 and COP21 the PDC's second goal is to assemble a coalition of investors who in aggregate will commit to decarbonizing at least USD 100bn of institutional equity investment.
|Activities|| With the recognition of the UN Secretary General, Ban Ki-moon, and the support of the Principles for Responsible Investment, the Coalition will, in coming months, recruit and convene as many asset owners and asset managers as possible.
It will, however only convene and advise investors who are fully committed to measuring, disclosing and reducing GHG emissions associated with their portfolios. Consequently, investors who join the Coalition will lessen their carbon exposure with regards to current annual emissions and/or potential emissions from current fossil fuel reserves.
|One or two success stories achieved|| Surpassed decarbonization target of $100bn in decarbonized assets by a factor of 6 for COP 21 reaching $600bn in commitments.
27 members from around the globe and growing. Issued first progress report at COP 21 and second report will be released at Climate Finance Day Nov 4.
Monitoring and Impacts
|Function of initiative||Implementation|
|Activity of initiative||Goal setting (ex-ante)|
|Goals|| Long term objectives:
The Portfolio Decarbonization Coalition (PDC) is UNEP FI´s platform for investor leadership on climate change. It is a multi-stakeholder initiative that seeks to support and catalyze the transition to the low-carbon economy by mobilising and convening institutional investors committed to restructuring their portfolios accordingly. The PDC stands out as a platform of leaders because in order to participate investors have to make a clear, quantified, and actionable, commitment to address GHG emissions, and the resulting risks, via their ´core´ (as opposed to their ‘satellite’) portfolios. Investors wishing to participate in PDC are encouraged to commit to measuring and disclosing, via the Montréal Carbon Pledge, the carbon footprint of their investment portfolios on an annual basis, and they are required to (ii) taking action to start aligning their core portfolios with the low-carbon economy . The Coalition was co-founded in 2014 by the UN Finance Initiative (UNEFI), the fourth national pension fund of Sweden (AP4), Europe’s largest asset manager Amundi and CDP, the most important mechanism for climate disclosure worldwide. As of today, the PDC convenes 27 investors overseeing the gradual decarbonization of a total of more than USD 600 billion in Assets under Management (AUM), dramatically surpassing in November of 2015, its original target of USD 100 billion.
The above means that the PDC has become the global investor hub on aligning portfolios with the low carbon economy. The more specific objectives of PDC are: 1. To mobilize and convene a critical mass of committed investors who collectively start managing, in alignment with the low-carbon economy, USD trillions of assets under management (AUM); only if a critical mass is reached will portfolio decarbonization among investors start having impacts in the real economy. 2. Support committed investors in their carbon disclosure (through the Montreal Pledge) as well as in the implementation of their decarbonization plans; and 3. Help financial policy-makers drive investor climate disclosure and decarbonization by highlighting best practice and establishing new norms.
Short term actions and goals in 2016: Since COP 21, PDC has focused on developing a work programme, and putting in place a governance structure to see it through the 2016-2018 period. This includes actively fundraising to support the proposed programme of work. The initiative places emphasis on education and knowledge sharing amongst investors. In response to this, PDC continues to host high level workshops and webinars addressing the complexities of portfolio decarbonization. In addition, the PDC is in the midst of producing its second annual report which will highlight progress made since COP 21 with regards to members’ decarbonization commitments. The report will be launched at Climate Finance Day in Casablanca on November 4.
PDC has also been discussing membership with some large asset owners who we are hoping to recruit in time for COP 22, but the emphasis has not been on recruitment since the Paris talks. We have focused more on developing and refining a work programme and securing funds for the initiative. In future, the hope is that
The PDC has developed a detailed 2 year work programme that focuses on the following areas: 1. General recruitment – recruiting additional asset owners and managers to the initiative – “Decarbonizing the trillions.” 2. Technical guidelines on portfolio design - This project will focus on asset class and sector specific guidelines on climate-performance strategies and reporting for investors. 3. Linking Portfolio Disclosure and Decarbonization to Financial Regulation - This project will look at the potential use of climate-performance disclosure by investors for financial legislation and regulation. 4. Member led activities - PDC will also encourage its membership to initiate its own activities. This would include events, webinars, workshops etc, organised and sponsored by members of the PDC. Examples of this include the Bellagio and Medici seminars hosted by PDC co-founder Amundi, designed for the asset owner members of the PDC. Members would then report back on the outcomes.
|Comments on indicators and goals|
|How will goals be achieved|
|Have you changed or strenghtened your goals|
|Progress towards the goals|
|How are you tracking progress of your initiative|
|Available reporting||Please see previous responses. PDC produces an annual progress report. The next iteration will be published at Climate Finance Day on November 4. Last year’s report can be found here:|
|Research and educational organisations||1||University of Sydney (Australia).|
|Non-governmental organisations||1||Toronto Atmospheric Fund (Canada).|
|Regional / state / county actors||0|
|City / municipal actors||0|
|Financial Institutions||46|| Asset Owner members:
Univest Company (United Kingdom), ABP (Netherlands), Allianz (Germany), AP4 (Sweden), Australian Ethical (Australia), Caisse des Dépôts (France), Church of Sweden (Sweden), Environment Agency Pension Fund (Denmark), Fonds de réserves pour les retraites (France), Humanis (France), KLP (Denmark), Local Government Super (Australia), Le Régime de Retraite additionnelle de la Fonction publique (France), NYS Common Retirement Fund (USA), Storebrand (Norway), Univest Company (USA). Asset management members: A Capital (USA), Amundi (France), BNP Paritas (France), Hermes Investment Management (United K.), Inflection Point Capital Management (United K.), Mandatum Life (Finland), Mirova (France), MN (USA), Öhman (Sweden), RobecoSam (Switzerland), Sarasin & Partners (United K.), Sonen Capital (USA), SURA Asset Management (Mexico), WHEB (United K.)
|Supporting partners||4||United Nations Environment Programme and its Finance Initiative - UNEP FI (Switzerland), AP4 (Sweden), Amundi (France), CDP (United Kingdom).|
|Number of members in the years|| |
|Have only national states as participators||No|
|Transport||Agriculture||Forestry||Business||Financial institutions||Buildings||Industry||Waste||Cities and subnational governments||Short Term Pollutants||International maritime transport||Energy Supply||Fluorinated gases||Energy efficiency||Renewable energy||Supply chain emission reductions||Adaptation||Other||Resilience||Innovation||Energy Access and Efficiency||Private Finance|
Not only have national states as participators