Prince Charles wants pension funds to take lead on climate change

Jonathan Leake and Danny Fortson

Prince Charles is to convene a meeting of some of the world’s largest pension funds to discuss how best to invest their trillions of dollars to help reduce climate change.
The meeting, likely to be held at Clarence House in October, will bring together senior executives from 12 funds including Calpers, America’s largest public pension fund. Known as the P8 Group, after the number of founder funds, they control $3 trillion (£1.8 trillion) in total.
Institutional investors largely ignore the “green” or ethical credentials of the companies they invest in, focusing instead on dividends and financial returns. A study of 118 UK-based equity funds, conducted by Mercer and Trucost for the wildlife charity WWF, found that measurement of the environmental impact of their investments was inconsistent. Also, the funds’ carbon footprints varied enormously.
Danyelle Guyatt, a principal in Mercer’s responsible investment team, said: “The investment management industry has a long way to go before pension funds can feel reassured that sufficient attention is being paid to the investment implications of the shift to a low-carbon economy.”
Last week, Prince Charles said he wanted the P8 to show other funds worldwide how they, too, could invest ethically without putting members’ money in jeopardy. It will be the P8’s fourth meeting, and the most important because it will be in the run-up to the UN climate change conference in Copenhagen in December.
The P8 Group was set up by the University of Cambridge Programme for Sustainability Leadership, which has the prince as its patron. The department runs a secretariat for high-level business groups, including the Corporate Leaders Group on Climate Change.
Aled Jones, deputy director of the Cambridge programme and facilitator of the pensions group, said: “The P8 is about finding ways of investing that mitigate rather than exacerbate climate change. They look for large-scale ways of investing in green projects, mostly in developing countries.”
• The Chinese minister who oversees the country’s controversial one-child policy said that the UK “could learn from the Chinese experience” by using population control to fight climate change.
Dr Baige Zhao, head of the national population and family planning commission of China, said that since its introduction in 1979 the policy had reduced the birth rate from 5.8 births per woman to 1.8. It had led to 400m fewer births and saved 1.6 billion tonnes of carbon emissions. Speaking at a conference in London last week, she said: “The same principles of population management that have been applied in China can be applied in the UK. The UK could learn from the Chinese experience.”
• Could carbon rationing be in the offing? Jeremy Oppenheim, of McKinsey Consulting, said last week that to meet climate change targets the 10 tonnes of carbon emissions produced annually by each Briton would have to be cut to 2 tonnes a year by 2050, equal to less than 6kg a day. The consultancy said that the government had not grasped the economic and social consequences of such a change. The daily figure equates to just 25 miles of driving in a family car.