The One Planet Sovereign Wealth Funds (OPSWF) initiative was established at the inaugural One Planet Summit on the 12th December 2017 in Paris, championed by the French President Emmanuel Macron.
With the common goal to accelerate the transition towards a low carbon economy, a group of six sovereign wealth funds (Abu Dhabi, Kuwait, New Zealand, Norway, Saudi Arabia, Qatar) launched a unique framework in July 2018 to support the alignment of large, long-term and diversified asset pools with the goals of the Paris Agreement.
The group published the One Planet Sovereign Wealth Fund Framework setting out three principles to accelerate the integration of climate change analysis into the management of large, long-term and diversified asset pools :
- Alignment: Build climate change considerations, which are aligned with the SWFs’ investment horizons, into decision-making.
- Ownership: Encourage companies to address material climate change issues in their governance, business strategy and planning, risk management and public reporting to promote value creation.
- Integration: Integrate the consideration of climate change-related risks and opportunities into investment management to improve the resilience of long-term investment portfolios.
The One Planet Asset Managers (OPAM), the One Planet Private Equity Funds (OPPEF) initiatives and the One Planet Research Forum have also been established to accelerate efforts in supporting the implementation of the Framework, and to support the transition towards more sustainable financial markets.
On November 20, President Emmanuel Macron met with 33 CEOs from among the world’s largest institutional investors to discuss climate action. These financial institutions, with over $30 trillion in assets under management and ownership, have aligned behind the One Planet Sovereign Wealth Funds (OPSWF) Framework to accelerate the integration of climate-related risks and opportunities into large, long-term asset pools and to support the goals of the Paris Agreement.
This network continues to grow; nine new sovereign wealth funds and six new asset managers joined the Founding Members in pledging their support for the OPSWF Framework and sharing evidence of recent climate-related actions. Activities discussed included the strengthening of responsible investment policies, increased corporate engagement on climate-related financial disclosures, and new investments in renewable energy and climate solutions. The meeting was also attended by CEOs of five private investment firms, who announced the establishment of the One Planet Private Equity Funds initiative.
During the meeting, CEOs of sovereign wealth funds and asset managers made Statements of Support to drive the Task Force on Climate-Related Financial Disclosures (TCFD) recommendations as a global reporting standard. This action was taken as CEOs identified the lack of universal reporting standards as a systemic barrier to implementing the Framework. They acknowledged that galvanizing the global financial system behind the TCFD would help generate efficiency and improve capital allocations to those companies best managing climate-related risks and leading the transition. In the coming year, they will undertake technical exchanges on the TCFD and engage with companies and asset managers to encourage TCFD-aligned reporting. The CEOs of the OPPEF members expressed their support for this initiative by the sovereign wealth funds and asset managers.
The CEOs and the President also discussed the need for a sustainable recovery from Covid-19. Given their size and influence in the financial system, these institutions have the capacity to scale up and accelerate the transition to a net zero carbon economy where people and planet can thrive together.