Leading European pension funds are joining forces with the United Nations Environment Programme and its Finance Initiative (UNEP FI) to reduce the carbon footprint of $500bn of worldwide institutional investment.

The Portfolio Decarbonization Coalition (PDC) was launched at the UN Summit on Climate Change, in response the UN secretary general Ban Ki-Moon's invitation to leaders from government, finance, business and civil society to bring "bold announcements and actions on climate change" to the summit.

Co-founded by the UNEP and UNEP FI, the Coalition also includes the fourth national pension fund of Sweden AP4, Europe's largest asset manager Amundi, and CDP - an international not-for-profit organisation that provides a global system for environmental information. Chief executive officer of AP4 Mats Andersson announced the PDC at the summit.

"We are both proud and honoured to receive the trust of the UN Secretary General to take the lead of this Coalition to support our peers in taking climate action. Climate change is more and more recognised as a financial risk and it is our duty, as trustees, to take concrete steps to reduce this," he said.

The Coalition will reach out to institutional investors worldwide and will be assisted by the UN-supported Principles for Responsible Investment (PRI) – the largest global network of investors focused on sustainable development – as well as other relevant networks. Its formation sends a strong signal to carbon-intensive companies that carbon-efficiency is now centre stage.

Climate change is an ever-increasing issue for investors across the globe with GHG emissions presenting an unprecedented threat to economic stability, to portfolios, and to their beneficiaries. The PDC aims to reduce the carbon footprint of $500billion of investment in total, with an intermediate target of $100bn by December 2015.

"USD 100 bn is a significant amount but it is absolutely feasible. We hope that by reaching this target, investors can show that a different course of action is possible - where institutional investors' goals are aligned with, and support, the common good," said Andersson.

First published: 25.09.14
Lindsay.sharman@wilmington.co.uk