One Planet Sovereign Wealth Fund Working Group publishes framework on climate change
President Emmanuel Macron of France and Prime Minister Erna Solberg of Norway convened a roundtable discussion with the One Planet Sovereign Wealth Fund Working Group (“One Planet SWF Group”) at the Elysée Palace followed by a press conference, to mark the publication of the One Planet Sovereign Wealth Fund Framework (“the Framework”).
The objective of the Framework is to promote the integration of climate change analysis in the management of large, long-term and diversified asset pools. Building on current industry best practice, the Framework aims to foster a shared understanding among long-term asset owners with regard to key principles, as well as methodologies, and indicators related to climate issues. It also aims to identify climate-related risks and opportunities in their investments and enhance their investment decision-making frameworks to better inform SWFs’ priorities as investors and participants in financial markets.
The announcement marks the culmination of six months’ work by the One Planet SWF Group comprising Abu Dhabi Investment Authority, Kuwait Investment Authority, the New Zealand Superannuation Fund, Norges Bank Investment Management of Norway, the Public Investment Fund of the Kingdom of Saudi Arabia, and the Qatar Investment Authority, who collectively manage over $3 trillion in assets. Having both size and long-term investment horizons, sovereign wealth funds (“SWFs”) are in a unique position to promote long-term value creation and sustainable market outcomes. The Framework’s recommendations are voluntary so as to take into account the diversity of mandates and legal contexts of the members.
Championed by President Macron of France, the initiative was launched at the One Planet Summit in December 2017, to help integrate financial risks and opportunities related to climate change into the management of large, long-term asset pools.
The six founding members of the SWFs said:
“By using the Framework, SWFs can reinforce their long-term value creation, improve their risk-return profile, and increase long-term portfolio resilience by factoring and integrating climate issues into their decision-making. The One Planet SWF Group hopes that other long-term institutional investors will be able to make use of this Framework in the execution of their mandates and investment objectives.”
The members of the One Planet SWF Group will work with the International Forum of Sovereign Wealth Funds and other cooperative platforms for asset owners to exchange and advance best practices on climate issues.