February 25, 2024
Funds

Sovereign wealth fund leaders explore investing to achieve the Paris Agreement 


Senior leaders from 21 sovereign wealth funds, managing over a trillion dollars in assets, gathered this week at the Commonwealth’s Headquarters in London to discuss scaling up investment to limit climate change.

The meeting was chaired by the Commonwealth Secretary-General, the Rt Hon Patricia Scotland KC, and Lord Sarfraz, co-chair of the UK All Party Parliamentary Group on Sovereign Wealth Funds. The high-level event was the first time the leaders of sovereign wealth funds had met under the Commonwealth banner to share ideas about investing in clean energy. 

Countries use sovereign wealth funds to invest for future generations, stabilise their economies and promote economic development. As long-term investors, they are well-placed to finance clean energy and consider the impacts of climate change on their portfolios. Being government-owned institutions, markets and other investors often look to them for leadership.  

The Commonwealth Secretary-General, the Rt Hon Patricia Scotland KC, and HRH The Duke of Gloucester

Opening the roundtable meeting, the Commonwealth Secretary-General said:  

“Today’s event is a starting point in our effort to design a programme with concrete, measurable outputs which can boost investment in clean energy, particularly in small island developing states.” 

“The scale of the challenges we face demand our highest levels of energy, ambition and expertise. I have no doubt that the group of people assembled here has that energy, ambition and expertise in abundance – and that if we can find the best ways to work together, we can make a genuine difference.” 

Many at the meeting noted that there is currently a significant financing gap, with investment in clean energy being below what is needed, particularly in developing countries, to achieve the Paris Agreement’s goals.

Delegates also noted that sovereign wealth funds have a critical role to play, and have already undertaken important work, to bridge this financing gap. Setting targets for reducing emissions from their portfolios, co-investing in clean energy in developing countries, setting an internal carbon price, working with high emitting companies to reduce emissions and linking staff’s pay to carbon reduction goals, were all raised by delegates as ways for sovereign wealth funds to limit climate change. 

Lord Sarfraz at the roundtable meeting

Lord Sarfraz described the Commonwealth as a “really special platform” to advance work in this area.  He said:  

“It’s not just the Secretary-General’s influence over a number of Heads of Government but also the layers underneath that – the cultural linkages and business networks – all of these layers will be a great resource for sovereign wealth funds.” 

During their deliberations, there was widespread agreement that sovereign wealth funds can contribute significantly to increasing investment in clean energy and reducing emissions. There was also consensus that the Commonwealth Secretariat should undertake further work in this area. 

The meeting was attended by HRH The Duke of Gloucester, who has a keen interest in the role sovereign wealth funds can play in limiting climate change.


Media contact

  • Victoria Holdsworth  Communications and Media Liaison Lead, Commonwealth Secretariat
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