Industry

UK Needs to Demonstrate Climate Leadership, Not Support Coal – PRI

Ahead of COP26, PRI-convened asset owners seek clarification on UK government climate targets, risks and opportunities.

The UK Government’s reluctance to reverse approval of a new coal mine is at odds with its climate change targets, said Fiona Reynolds, CEO of the Principles for Responsible Investment (PRI), after the UN-backed body sought reassurance from UK Prime Minister Boris Johnson over his plans for COP26.

“Many investors are no longer investing in new coal mines; banks aren’t providing funding for more coal mines; and a number of insurers will no longer insure them. That’s because they don’t see coal as financially viable over the long term,” she said, adding that support for a new coal mine “doesn’t seem to align” with the UK’s climate targets, such as a reduction in carbon emissions by at least 68% by 2030, over 1990 levels.

The decision by Communities Secretary Robert Jenrick not to intervene after Cumbria County Council gave planning permission for the new colliery has received widespread criticism.

“As host of the largest global climate talks since the signing of the Paris Agreement, it is mystifying that a new coal mine has been approved. This will make it much harder to fulfil the ambitions of the alliance to phase out coal,” wrote John Sauven, executive director of Greenpeace, to Prime Minister Boris Johnson, asking him to reverse the decision.

Last week, a group of leading UK asset owners published letters to Prime Minister Boris Johnson and Secretary of Transport Grant Shapps, asking for a meeting and calling for more clarity around the government’s plans to execute its climate targets.

Convened by the PRI, the group has asked to meet with government ahead of COP26 to align investor targets with the country’s policymakers, as well as to reinforce the importance of the leadership role the UK must assume this year in order to encourage collaborative climate action.

“We want to signal to the government that, as investors, we’re committed to net-zero by 2050, but we now need the policy implementation from government in order to bring about changes in the economy,” Reynolds told ESG Investor.

As well as calling for the UK government’s planned domestic net-zero strategy (scheduled to be published this year) to address the sustainable land use challenges faced by the UK, asset owners have called for the implementation of an early phase-out date for internal combustion engine (ICE) vehicles.

Acknowledging the financial strain on public budgets caused by Covid-19, the letters further outline the importance of utilising the City of London and private finance “to help deliver the ambitious decarbonisation needed”.

“We want to better understand the risks surrounding government plans, but also the opportunities that are going to be available to us when investing in a new green economy,” Reynolds added.

“As major asset owners in the UK, we want the government to be bearing in mind the factors we have addressed in the letters, in order to make sure there is a just transition.”

The UK government isn’t the only government which has been challenged for its undercutting of climate goals. Australia has come under fire for joining the Coalition for Climate Resilient Investment, even as the country has refused to commit to net-zero emissions. The country is displaying “the worst kind of hypocrisy”, Greenpeace Australia Pacific has said.

The published letters were signed by UK asset owners, including Brunel Pension Partnership, BT Pension Scheme Management and Local Pensions Partnership Investments.

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