Empowering retail investors to steer the climate change debate
Until now, approaches to addressing this need have overlooked a powerful decision-maker – retail investors (ordinary citizen investors). Approximately EUR 1 trillion of the assets of European retail investors are financing fossil fuels, despite 70 pct. of them wanting sustainability, and in particular climate-related, criteria to be reflected in their investment portfolios (Natixis Global AM Study 2017). However, few climate-friendly retail investment options exist at the moment.
The project aims to ensure that retail investors can invest in line with their beliefs. Mobilising just 1 percent of retail investors could potentially redirect EUR 5 billion to cleaner energy. 2˚ii is partnering with the WWF European Policy Office (WWF EPO), a fellow member of the EU’s High-Level Expert Group on Sustainable Finance, to run a targeted advocacy campaign to ensure that financial advisers are obliged to advise on sustainable investment products, investors can effectively invest in fossil-free funds and that investors are aware of the climate impact of their investments. This will also encourage the development of more investment options that are compatible with a 2˚C future.
As part of its cutting-edge work, 2°ii co-initiated the first climate-related financial regulation in Europe – Article 173 of France’s Energy Transition law – which made climate change-related reporting for asset owners and asset managers mandatory. It also co-started the Swiss initiative on reporting against the Paris Agreement – involving the majority of Swiss pension funds and insurance companies – and launched the first international climate disclosure awards with the French Environment Ministry and Treasury.
Aims of the initiative
Through this project, 2˚ii aims to:
- Enable retail investors to invest in line with their preferences by integrating sustainability requirements into EU financial legislation;
- Ensure climate transparency for investment products to make retail investors aware of the impact of their investments;
- Facilitate a rapid rise in the number of Paris-compatible investment options for retail investors.