UK government’s U-turn on net zero is “eroding confidence” investors warn
A coalition of 32 of the UK’s largest investors has pushed back against the UK government’s revised approach to climate targets and described prime minister Sunak’s policies as “misguided.”
In a letter sent to the prime minister on Thursday, the investors, who are members of the Institutional Investors Group on Climate Change (IIGCC), the United-nations backed PRI and the UK Sustainable Investments and Finance Association (UKSIF), highlighted that the UK will need additional investments £50 billion to £60 billion annually to meet its net zero targets.
In order to make these commitments, investors would need certainty, consistency, clarity, and continuity, the signatories warned.
Investors also took aim at the UK government’s decision to push back the ban on internal combustion engines to 2035.
They argued that “the 2030 target for banning new internal combustion engine (ICE) car sales has provided a vital catalyst to accelerate the transformation of the vehicle industry” and provided investors with then necessary clarity to make decisions on capital allocation.
The letter is signed among others by some of the nation’s largest pension funds including the the Universities Superannuation Scheme, LGPS Pools Brunel Pensions Partnership, Border to Coast and LPPI and the Local Authority Pension Fund Forum. On the defined contribution side, Cardano and the People’s Partnership, provider of The People’s Pension backed the call.
It has also been backed by a broad range of asset managers, including Aviva, CCLA, Jupiter, Robeco, Nordea and Ninety One.
It comes a week after Rishi Sunak’ government faced open criticism from a collective of more than 400 investors and major UK corporations, including the energy giant EON and IKEA UK, who joined forces to condemn the government's weaking of net zero targets in a joint letter to the prime minister, urging him not to backtrack.