Use COP27 to phase-out fossil fuels, $39trn investor coalition and hundreds of health groups urge

The G20 agreed in 2009 to phase out “inefficient” fossil fuel subsidies

The Investor Agenda Group issued a statement to national governments late on Wednesday (13 September), garnering support from most – but not all – of the world’s largest fund and asset managers. Notable absences from the 532-strong signatory list at this point include BlackRock and Vanguard.

The statement notes that there was a “significant acceleration of action” on climate mitigation ahead of, and at, COP26 in Glasgow last year. But it argues that there is still much more to be done to avoid the worst of the climate crisis, with levels of warming up to 2.4C still predicted by 2100. This exceeds the Paris Agreement’s 1.5C and 2C pledges, the former of which has become the guiding principle for the UN-convened annual summits.

As the statement is an open letter, all governments are urged by the investors to update their Paris Agreement commitments ahead of COP27, as they promised to do last year. Updates, the letter states, should provide long-term certainty on the energy transition, carbon pricing, nature and supporting affected communities.

The letter notably argues for fixed deadlines to end coal power and fossil fuel subsidies. G7 nations have already pledged to end “inefficient” subsidies by 2025, but climate activists and economists have urged more clarity on how, precisely, this should be defined. On a more global scale, the final COP26 agreement states that nations will phase out “unabated” coal power and “phase down” other fossil fuels. This marked the first time that fossil fuels were mentioned, but the wording was weakened at the last minute due to interventions from emerging economies powered largely by fossil fuels, such as China and India.

Investors signing the letter argue in favour of a fossil fuel phase down and out that is 1.5C-aligned. The Intergovernmental Panel on Climate Change’s (IPCC) latest major report, published in April, warned that current fossil fuel pipelines and operations will need to be scaled back through to 2050 to avoid the worst physical impacts of temperature increase.

The Investor Agenda letter also proposes several other interventions to policymakers. It urges the implementation of mandatory climate risk reporting for large firms and financial institutions, as was implemented in the UK this spring. It also urges concerted efforts to scale finance for climate adaptation and resilience with a focus on developing and most-affected nations.

“Investors are taking action as it is not only permitted by law but is in many cases required to ensure their ability to generate returns in the long-term as a core fiduciary duty and benefit from the opportunities associated with the shift to a net-zero emissions economy,” the statement summarises.

“We recognise that governments’ ability to deliver on their commitments will depend on private capital flows playing a strong and supportive role in mobilizing finance at the scale needed to achieve the Paris Agreement’s goals.

“We are committed to working with governments to ensure policy mechanisms are developed and implemented to transition to a climate-resilient, net-zero emissions economy by 2050 or sooner, with interim targets in line with credible 1.5C pathways.”

Non-proliferation treaty

In related news, almost 200 health organisations have this week joined the World Health Organisation (WHO) in supporting a new call for a global fossil fuel non-proliferation treaty to be ratified.

Such a treaty would require governments to set legally binding plans to phase out fossil fuel use – both domestically and through their international finance activities. Plans would need to set an end date for new drilling, mining and pipeline activities.

The WHO has stated that such a treaty could be modelled on the Framework Convention on Tobacco Control which was introduced in 2003. It would be based not only on the climate harms caused by excessive fossil fuel use, but on the human health impacts too. For example, polluted air from coal use and ICE vehicles, or polluted water from oil spills and fracking, would be considered.

“The modern addiction to fossil fuels is not just an act of environmental vandalism. From the health perspective, it is an act of self-sabotage,” said the WHO president, Dr Tedros Adhanom Ghebreyesus.

The need for a just transition to be supported through the treaty is emphasised. “While the energy transition cannot be delayed, we also cannot leave behind the communities and workers that currently depend on fossil fuel jobs,” said the Global Climate and Health Alliance’s director Jeni Miller.

The global engagement director for the treaty initiative, Harjeet Singh, added: “We are thrilled to see health professionals step out of their operating rooms, clinics and offices to support the Fossil Fuel Non-Proliferation Treaty for the sake of people and the planet, alongside a growing chorus of heads of government, Nobel laureates, leading academics and civil society.

“The world is waking up to the reality of the climate crisis which is inextricably tied to millions of lives and their health. It’s time for world leaders to meet the bar for climate leadership by working together to end the fossil fuel era in a way that is fair and fast.”