SEVEN investor-focused groups expect the global stocktake at an upcoming United Nations (UN) convention on climate change to highlight the need for an “urgent course correction”.

The groups, founding partners of a collective named the Investor Agenda, say that governments continue to see tackling climate change as separate from – and less important than – other aspects of economic and fiscal policy. 

In their view, the level of financial incentives remains insufficient to catalyse or accelerate the financing needed – particularly for adaptation to the impact of climate change, which they note to be particularly under-funded.

The seven groups, which will be at the United Nations Framework Convention on Climate Change, are:

• The Asia Investor Group on Climate Change,

• CDP,

• Ceres,

• The Investor Group on Climate Change,

• The Institutional Investors Group on Climate Change,

• Principles for Responsible Investment, and

• The UNEP Finance Initiative.

On Wednesday (Sep 6), the Investor Agenda released a report outlining core features that should underpin climate policy. 

The report comes ahead of the UN’s first global stocktake – a two-year process that is set to take place every five years, to assess where nations stand in meeting the goals of the 2015 Paris Agreement. This maiden audit is expected to conclude at the Conference of the Parties summit (COP28), which will be held in the United Arab Emirates from Nov 30 to Dec 12.  

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The Investor Agenda outlined eight key features of “good” climate policy frameworks which it deems will enable and accelerate investments needed to meet the goals of the Paris Agreement. 

“Policy frameworks that lack one or more of these features are much less likely to deliver the transition to a low-carbon economy, or effective adaptation to the unavoidable impacts of physical climate change.” 

The first two features underscore the need for a clear commitment to action, and well-defined short-, medium- and long-term targets.

The third feature of a sound climate-change policy, the Investor Agenda said, is that it is comprehensive and at scale; it should also cover all major areas of the economy. 

Fourth, policies should be sector-specific, to ensure alignment with the delivery of overarching commitments and interim targets.

Fifth, governments should offer the right incentives to encourage changes in the new economy, while also encouraging investors to provide the capital needed to enable these changes. 

Sixth, there has to be a “just transition”. This concept emphasises fairness and inclusivity, so that no groups or individuals are left out from the benefits of climate policies.

The seventh key feature is transparency among policymakers, investors and companies in managing climate risks and opportunities as well as the low-carbon transition.

Lastly, organisations and policymakers should develop structured plans on the climate actions they intend to take, while clearly outlining the cost and intended timeline of these actions. They should also report regularly on the progress made. 

The founding partners of the Investor Agenda said they intend to support efforts to make these principles by “explicitly calling on governments” to ensure that their climate policies incorporate all eight key features, among others. 

They also intend to encourage companies and other actors to develop credible transition plans. 

“Transition plans are important because they identify dependencies, in particular those areas where action is dependent on policymaker action. Furthermore, they are crucial for transparency and accountability purposes,” said the Investor Agenda.