LONDON – Investors managing $37 trillion in assets urged Japan to slash the country’s carbon emissions, saying Monday that a strong signal from Tokyo could help galvanize international climate action ahead of a U.N. summit in Glasgow in November.
Institutional investors, traditionally wary of singling out governments for criticism, are starting to subject policy-makers to greater public pressure amid mounting fears over the risks that climate change poses to global markets.
While Britain and much of the European Union aim to cut carbon emissions to net zero by 2050, Japan is the only G7 nation still building new coal-fired power plants, drawing criticism from climate campaigners.
“Japan’s approach to reducing emissions is being watched closely throughout Asia,” said Rebecca Mikula-Wright, director of the Asia Investor Group on Climate Change, one of various investor coalitions to sign an open letter to Prime Minister Shinzo Abe.
“If investors see strong and positive policy signals that encourage deeper emissions reductions by 2030, and a clear path to net-zero emissions by mid-century, they will respond with greater investment in clean technology and climate-resilient infrastructure,” Mikula-Wright said in a statement.
The letter calls on Japan’s government to submit a more ambitious target for cutting emissions ahead of the two-week Glasgow summit, seen as a decisive test of international commitment to the 2015 Paris Agreement to combat climate change.
The groups signing the letter said they included more than 630 investors representing about half of the world’s assets under management. Members of the various groupings include BlackRock, insurer Allianz, BNP Paribas Asset Management and CalPERS.
The government’s image as a climate laggard is increasingly setting it at odds with the country’s companies as well as global investors and climate activists.
Last month, a Reuters poll found that Japanese companies overwhelmingly feel that the country should shift away from its dependence on coal-fired power, even though a third of firms say such a shift would harm their business.
The government faces a dilemma as it wants both to be recognized as a leader on climate change but also to keep open its options on coal, particularly in the light of the 2011 Fukushima nuclear disaster.
With climate change increasingly topping lists of investor concerns, Bank of Japan Governor Haruhiko Kuroda told the World Economic Forum in Davos in January that Japan should do more to cut emissions and mitigate the risks climate change poses.
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