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”) which includes representatives from the Public Investment Fund at the Elysée Palace in Paris 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.
At the press conference, H.E. Yasir Al-Rumayyan, Managing Director of the Public Investment Fund (“PIF”) of Saudi Arabia read out a joint statement on behalf of the One Planet SWF Group. He also emphasized that PIF has already launched a number of initiatives which support long-term investment in areas that will help to address the issue of climate change. This includes the launch of a 200 GW solar energy plan for Saudi Arabia, and investment in renewables and utilities, recycling and energy efficiency services companies.
The announcement marks the culmination of six months’ work by the One Planet SWF Group comprising representatives from Norway, New Zealand and the Middle East, 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.
Commenting on the announcement, President Macron said:
“I would like to congratulate the founding sovereign wealth funds on this important milestone. Considering the geographic and cultural differences, the collegial technical collaboration of the group is, in itself, an accomplishment. The commitment by major investors to integrating climate change in their investment decision-making process not only has the potential to enhance their returns but also supports the COP21 objectives.”
The six founding members of the SWFs added:
“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.
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.
At the press conference, H.E. Yasir Al-Rumayyan, Managing Director of the Public Investment Fund (“PIF”) of Saudi Arabia read out a joint statement on behalf of the One Planet SWF Group. He also emphasized that PIF has already launched a number of initiatives which support long-term investment in areas that will help to address the issue of climate change. This includes the launch of a 200 GW solar energy plan for Saudi Arabia, and investment in renewables and utilities, recycling and energy efficiency services companies.
The announcement marks the culmination of six months’ work by the One Planet SWF Group comprising representatives from Norway, New Zealand and the Middle East, 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.
Commenting on the announcement, President Macron said:
“I would like to congratulate the founding sovereign wealth funds on this important milestone. Considering the geographic and cultural differences, the collegial technical collaboration of the group is, in itself, an accomplishment. The commitment by major investors to integrating climate change in their investment decision-making process not only has the potential to enhance their returns but also supports the COP21 objectives.”
The six founding members of the SWFs added:
“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.
