2010 Investor Summit on Climate Risk

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Ban Ki-moon, Secretary-General, United Nations addresses the Summit

The 2010 Investor Summit on Climate Risk was held on January 14, 2010, at the United Nations Headquarters in New York City and was co-hosted by the UN Office for Partnerships, Ceres, and the UN Foundation.[1]

About

The purpose of the event was discussed in the final report on the summit:[2]

"Addressing climate change is crucial for ensuring future economic prosperity. Policies and investments focused on climate change will profoundly impact our ability to reduce carbon emissions and transition to a low-carbon global economy. To highlight the enormous opportunities of this transition and to assess the need for climate change policy, Ceres, the United Nations Office for Partnerships, and the United Nations Foundation co-hosted the fourth Investor Summit on Climate Risk at the United Nations on January 14, 2010.
The Summit brought together more than 520 financial, corporate, and investor leaders with more than $22 trillion in combined assets. Speakers from the investment community, business, labor, and government highlighted the fact that private investment in climate change solutions is crucial for addressing the climate crisis and will not happen at the necessary scale without strong climate and energy policies that limit emissions and put a price on carbon."

Summit Conveners

The following were listed as conveners of the summit:[3]

Co-Hosts

United Nations Leaders

State Treasurers, State/City Comptrollers, Asset Owners, Labor Representatives

Financial Services Firms, Investor Associations and Other Leaders

Foundation Endowments

Program

The following is the schedule of events for the summit:[4]

9:00 am Welcoming Remarks

9:20am Climate Change and the Global Economy

9:50 am The Road from Copenhagen: Climate Policy Developments

  • Todd Stern, Special Envoy on Climate Change, U.S. Department of State

10:20 am Policies to Scale Up Investment in the Low-Carbon Economy

10:50 am Investment and Business Opportunities in the Low-Carbon Economy

12:00 pm Announcement of 2010 Investor Statement on Catalyzing Investment in a Low-Carbon Economy

1:00 pm Luncheon Plenary Session

2:30 pm Investment Opportunities in the Carbon-Constrained World

3:30 pm Capitalizing the New Energy Future: Opportunities for Job Creation

3:50 pm Financing the Low-Carbon Economy: The Role of Institutional Investors

5:00 pm Closing Remarks

5:20 pm Conclusions and Next Steps

Participating Organizations

The following organizations were listed as participating in the summit.[5]

Closing Remarks from George Soros

George Soros makes closing remarks at the summit

In introducing George Soros, the Chairman of Soros Fund Management, LLC, Mindy Lubber described Soros as an "extraordinarily successful financial leader" who has pioneered some of the issues discussed at the Summit and who understands finance and climate change. She also described him as an "extraordinary philanthropist" who has fought for open society and democracy. Below are summaries of the topics Soros covered in his closing remarks:[6]

Reflections on Copenhagen

"George Soros opened by offering his reflections on Copenhagen, which he deemed “a failure.” He suggested that there was a general recognition of the importance of the issue, but national interests prevailed. Soros stated that Copenhagen was not the end of the road; it showed that there should be a bigger push by civil society to get the governments to reach some kind of agreement."

Policy Needs in the United States

"Soros observed how most of the countries at Copenhagen recognized the importance of the problem. Soros asserted that “the United States is the laggard.” The United States, by not passing a bill in Copenhagen, reflected a poor image to the rest of the world. He declared that “we have to catch up” and suggested that supporting the passage of climate legislation this year is “where we really need to exert ourselves.”"

Opportunities for Carbon-Saving Investments

"Soros maintained that “there are great opportunities for energy-saving or carbon-saving investments which are commercially viable without any legislation.” He referenced the potential returns from energy productivity. He went on to say that the substantial money from the stimulus package creates an opportunity, and he is working on the equity side of it – further adding that he “would be very happy to find some pension funds that would be happy with returns in the high teens for 30 years.” He proposed that “there are many deals of that kind” that could be put together and that this is the year to do them."

Special Drawing Rights

"Soros noted a particular failure of Copenhagen: the plan of assembling $10 billion per year for three years to support lesser-developed countries. Soros went on to argue that the outcome was not good, particularly given that the G20 in London offered $1 trillion with just “some smoke and mirrors.”
One of those smoke-and-mirror items was the issuance of $283 billion of special drawing rights (SDRs), which could be used to provide a much more significant amount of support to the less developed world. Soros put forward a proposal in Copenhagen to use special drawing rights for this purpose. He explained that special drawing rights are a very difficult instrument; if one wants to actually spend the money, one has to pay interest until the money is repaid, which is why most developed countries really have no use for the SDRs. Soros suggested they could transfer the SDRs to a green fund. The problem is that if it is actually spent, someone has to pay the interest – which is very low at only half a percent at the moment, but still a stumbling block. If a country donates the SDRs, it scores as a budgetary expense; every country has spent a lot of money recently to stimulate the economy and has to run budget deficits, so adding to the deficits to help other countries is a political non-starter.
Soros identified another problem with this approach, which is that anything the U.S. does with the IMF needs Congressional approval, which is hard to obtain. Soros suggested that the Obama Administration has had a hard time passing the original SDR allocations and is reluctant to go back to Congress, and for this reason the main opposition to the proposal is from the U.S. Administration. Given the political difficulty, public opinion could play an important role. More in depth, serious financial people could play a role in steering public option, which would be a worthwhile cause that comes with no monetary cost. “If there is anything like a free lunch, this actually is it.”"

Investor Actions Going Forward

"Soros concluded by discussing what investors, like those at the Summit, should do. He congratulated investors for releasing a policy statement, saying “it’s important that your voice be heard.” He suggested it is time “to be more proactive” and that “letting the world know what you are willing to finance would be very, very helpful.” Soros expressed pride in the hedge fund community, “which actually has done a lot;” hedge fund managers in London have financed the European Climate Foundation which plays an important role in Europe. He also noted his own engagement, including sponsoring a climate policy institute that he hopes will be able to help resolve the US-China tension by providing independent verification.
Soros described it as “really a tremendous accomplishment” that the Summit attracted so many people who are concerned with the issues, and he predicted that by pulling together, [leaders in the investment and financial community] will be able to make significant change."

References

  1. ↑ UN: 2010 Investor Summit on Climate Risk - Final Report, April 27, 2010, page i (accessed on Nov. 19, 2010)
  2. ↑ UN: 2010 Investor Summit on Climate Risk - Final Report, April 27, 2010, page 1 (accessed on Nov. 19, 2010)
  3. ↑ UN: 2010 Investor Summit on Climate Risk - Final Report, April 27, 2010, page ii (accessed on Nov. 19, 2010)
  4. ↑ UN: 2010 Investor Summit on Climate Risk - Final Report, April 27, 2010, page 4 (accessed on Nov. 19, 2010)
  5. ↑ UN: 2010 Investor Summit on Climate Risk - Final Report, April 27, 2010, page 37 (accessed on Nov. 19, 2010)
  6. ↑ UN: 2010 Investor Summit on Climate Risk - Final Report, April 27, 2010, page 27 (accessed on Nov. 19, 2010)
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