Should Sovereign Wealth Funds Invest to Achieve the Paris Agreement?

Almost all the government owners of sovereign wealth funds are signatories to the Paris Agreement under the United Nations Framework Convention on Climate Change. Yet, despite this commitment, the world is not on course to meet these goals. This insufficient progress towards the Paris Agreement’s goals is partly explained by a lack of financing. International Energy Agency (IEA) research suggests that in a scenario consistent with limiting climate change to 2°C annual investment in low-carbon power would have to approximately double and annual investment in coal power plants sharply decline. There has been a significant effort by regulators and investors to better integrate climate change considerations into financial markets and ensure investment is consistent with the Paris Agreement’s goals. There are also several investor-led initiatives that have also recognised the importance of climate change.

The article available at the link below argues that sovereign wealth funds should be at the vanguard of these efforts by investors to achieve the Paris Agreement’s goals.