Open letter to Green Climate Fund Board on keeping the fund fossil fuel free
Dear Members and Alternate Members of the Board:
We write to urge you to develop and adopt an investment policy for the treasury of the United Nations Green Climate Fund that maintains its current fossil fuel-free status and is consistent with international best practice for environmental, social, and governance (ESG) standards. To that end, in approving a competitive process for the selection of the Permanent Trustee at its 16th meeting next month, the Board should require that the Permanent Trustee be able to implement the GCF’s investment policy.
Ensuring that GCF assets do not cause climate change, do no harm, and contribute to the global public good is essential to the mandate of the GCF itself. The Review of the Interim Trustee presented at B.15 noted that the Fund should explore means to maintain a de-carbonized investment portfolio with income generated through green investments. Such an investment policy is equally necessary to ensure compliance with the Paris Agreement, specifically Article 2, which, among others, calls for “making finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development.” Further, in an age of climate crisis, exposure to investments in high-carbon, environmentally unsustainable sectors and practices poses systemic financial risk to the GCF, not to mention reputational and physical risk.