Key Takeaways
- • Forty of the world's largest pension funds, insurers and sovereign wealth funds warned at a closed-door COP31 meeting in Antalya that climate change poses rising systemic risks to financial stability, according to the Financial Times.
- • Investors including Singapore's Temasek, Danish pension fund PFA and UK insurer Legal & General attended; one attendee said long-term investors feared a "systemic risk problem" from climate change.
- • The meeting was only the second special asset-owner event to feature on the official COP schedule, reflecting growing reliance on private capital to meet climate finance targets.
- • Countries agreed two years ago to raise climate finance to at least $300bn a year by 2035, with an aim of $1.3tn, while many banks and asset managers have pulled back since the re-election of Donald Trump in 2024.
- • Dutch central bank president Olaf Sleijpen said the core problem is a shortage of credible, long-term climate policy rather than a shortage of capital, and estimated early coordinated action could roughly halve transition costs by 2030.
Summary
Forty of the world's largest pension funds, insurers and sovereign wealth funds have warned of rising systemic risks from climate change as finance takes center stage at the UN COP31 summit in Antalya, according to the Financial Times. The concerns about disruption to financial stability were raised at a closed-door meeting attended by investors including Singapore's Temasek, Danish pension fund PFA and UK insurer Legal & General. Former US vice-president Al Gore, co-founder of Generation Investment Management, was also present, according to attendees. One investor said long-term investors made clear they feared a "systemic risk problem" from climate change, and that capital will be essential to tackling it.
The meeting marked only the second time a special event for asset owners has featured on the official COP schedule. It comes as private sector finance is seen as increasingly vital to achieving targets set in official negotiations. Countries agreed two years ago to boost climate finance to at least $300bn a year by 2035, with the aim of reaching $1.3tn. Banks and asset managers were prominent at earlier COP talks following financial sector pledges made at the Glasgow COP in 2021, but many have since backed away amid the re-election of Donald Trump in 2024 and the subsequent Republican backlash against ESG issues.
Damien Navizet, head of financial markets sustainability initiatives at France's Caisse des Dépôts, said long-term investors had "never stopped working" on climate issues. He noted that many asset owners at the meeting felt they were not yet well equipped to assess and manage the risks of investing in emerging markets, where much of the required finance is needed. "They are tipping their toes and wading into the water very slowly," he said. Rasmus Bessing, co-chief investment officer and head of ESG investments at PFA, which oversees $120bn in assets, said he attended to discuss with asset owners and development banks how to create "frameworks right" to drive viable green deals.
Brazil's President Luiz Inácio Lula da Silva and the Brazilian Development Bank (BNDES) this week announced a plan to raise funds for climate-related projects involving the Green Climate Fund and private investors such as Brookfield. BNDES is also working with Generation Investment Management. Former US secretary of state John Kerry, who now co-chairs asset manager Galvanize, told the FT that people were beginning to realise "you can make a lot of money from the energy transition."
At a separate "insurance COP" held away from the official venue, industry executives discussed rising fiscal insurance risk from climate change. Butch Bacani, head of insurance at the UN environment programme, said "assets could become less investable or bankable." Olaf Sleijpen, president of the Dutch central bank and an ECB governing council member, argued that climate change affects banks, insurers and financial stability, and that it should not be left to private investors alone. He said the problem is often a shortage of "credible, consistent, long-term climate policy" rather than capital. Sleijpen added that net zero is the only way to keep climate change manageable, and that early, globally coordinated action could roughly halve the economic cost of the transition by 2030, from about 0.5 per cent of global GDP versus 1.3 per cent under a three-year delay.
The meeting marked only the second time a special event for asset owners has featured on the official COP schedule. It comes as private sector finance is seen as increasingly vital to achieving targets set in official negotiations. Countries agreed two years ago to boost climate finance to at least $300bn a year by 2035, with the aim of reaching $1.3tn. Banks and asset managers were prominent at earlier COP talks following financial sector pledges made at the Glasgow COP in 2021, but many have since backed away amid the re-election of Donald Trump in 2024 and the subsequent Republican backlash against ESG issues.
Damien Navizet, head of financial markets sustainability initiatives at France's Caisse des Dépôts, said long-term investors had "never stopped working" on climate issues. He noted that many asset owners at the meeting felt they were not yet well equipped to assess and manage the risks of investing in emerging markets, where much of the required finance is needed. "They are tipping their toes and wading into the water very slowly," he said. Rasmus Bessing, co-chief investment officer and head of ESG investments at PFA, which oversees $120bn in assets, said he attended to discuss with asset owners and development banks how to create "frameworks right" to drive viable green deals.
Brazil's President Luiz Inácio Lula da Silva and the Brazilian Development Bank (BNDES) this week announced a plan to raise funds for climate-related projects involving the Green Climate Fund and private investors such as Brookfield. BNDES is also working with Generation Investment Management. Former US secretary of state John Kerry, who now co-chairs asset manager Galvanize, told the FT that people were beginning to realise "you can make a lot of money from the energy transition."
At a separate "insurance COP" held away from the official venue, industry executives discussed rising fiscal insurance risk from climate change. Butch Bacani, head of insurance at the UN environment programme, said "assets could become less investable or bankable." Olaf Sleijpen, president of the Dutch central bank and an ECB governing council member, argued that climate change affects banks, insurers and financial stability, and that it should not be left to private investors alone. He said the problem is often a shortage of "credible, consistent, long-term climate policy" rather than capital. Sleijpen added that net zero is the only way to keep climate change manageable, and that early, globally coordinated action could roughly halve the economic cost of the transition by 2030, from about 0.5 per cent of global GDP versus 1.3 per cent under a three-year delay.
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