Sixteen investors and insurers with more than USD 2.8 trillion in assets under management have joined a call urging the G20 to end fossil fuel subsidies by 2020, highlighting the risk this continued government support creates for the financial sector.
Leaders from across the finance sector – including Legal and General, Aegon Asset Management, and Aviva Investors - have signed a joint statement calling for G20 governments to set a clear deadline for the phase out of fossil fuel subsidies and public finance for fossil fuels at the 2017 G20 Summit in Hamburg, Germany.
Research launched earlier this week by the Global Subsidies Initiative and the Overseas Development Institute found that ending subsidies to global fossil fuel production would be equivalent to eliminating all of the emissions from the global aviation sector. Research published in 2015 by the Overseas Development Institute and Oil Change International found G20 governments spend $444 billion each year to support fossil fuel production – despite pledging every year since 2009 to end subsidies and prevent catastrophic climate change.
Meryam Omi, Head of Sustainability and Responsible Investment Strategy at Legal and General, said: ‘In line with the commitments already made by G20 governments, we need to see a clear plan to phase out subsides to fossil fuels.
‘The current level of inefficient subsidies and lack of transparency are jeopardising the global goal of meeting the Paris climate targets and of ensuring a secure, healthy and reliable energy system.
‘As investors, we are faced with a tremendous opportunity to finance the low carbon transition and, as such, we look for the governments to set a clear timeline and a plan for phasing out fossil fuel subsidies to enable an orderly transition.’
Shelagh Whitley, Head of the Overseas Development Institute’s Climate and Energy research programme, said: ‘Global investors and insurers are sending a clear message to governments that burning public money through fossil fuel subsidies is not just bad for the planet, but bad economic policy too.
‘G20 Ministers must heed investor voices, and ensure that the leaders of their countries commit to a firm deadline to end fossil fuel subsidies at the G20 Summit in Hamburg later this year.’
Notes to editors
- The full statement and list of signatories can be viewed here
- Investors and insurers Actiam, Aegon Asset Management, Australian Ethical Investment, Aviva Investors, Bayerische Versorgungskammer, Dana Investment Advisors, EdenTree Investment Management Ltd, Environment Agency Pension Fund, First Affirmative Financial Network, Friends Fiduciary Corporation, Inflection Point Capital Management, KBI Global Investors, La Francaise, Legal and General, Trillium Asset Management LLC, Trilogy Global Advisors LP have more than $2.8 trillion in assets under management.
- The G20 Foreign Ministers will meet 16 and 17 February 2017 in Bonn, Germany, and the G20 Finance Ministers and central bank governors will meet from 17 to 18 March 2017 in Baden-Baden, Germany.
- The G20 leaders’ summit will take place in Hamburg, Germany on July 7th and 8th 2017
- The February 2017 report from GSI and ODI, ‘Zombie energy: climate benefits of ending subsidies to fossil fuel production’, finds that a complete removal of subsidies to fossil fuel production globally would reduce the world’s emissions by 37 Gt of CO2 over 2017-2050. This is roughly the amount of carbon dioxide that would result from burning all proven oil reserves in the United States and Norway.
- The November 2015 report from ODI and OCI, ‘Empty promises: G20 subsidies to oil, gas and coal production’, found G20 governments spent $444 billion a year to support fossil fuel production – via national subsidies ($70 billion), investments by state-owned enterprises ($286 billion) and public finance ($88 billion)