The world’s largest economies are to ensure regulation is not preventing pension funds and other institutions from investing in infrastructure under an agreement signed at the G20 summit.
The meeting, held on Brisbane, Australia, saw the heads of government agree to implement the OECD’s high-level principles of long-term investment financing, which said public funding should not “crowd out” private long-term capital.
In a communiqué announcing the G20 global infrastructure initiative, world leaders said they would look to increase the transparency and functioning of securitisation markets, a goal of the European Commission to attract funding to small and medium-sized enterprises.
“These actions will assist in our goal to attract increased private sector financing for infrastructure investment and for small and medium enterprises,” the agreement said.
It added that work would be undertaken to develop infrastructure further as an asset class and increase the amount of financing available to markets.
The document also committed G20 members to lowering barriers to investment, boosting the pipeline of projects ready for investment and helping pair up investors and projects.
As part of the initiative, the G20 will launch an infrastructure hub based in Sydney to coordinate global governments’ efforts.
Against expectations, the G20 also said it supported “strong and effective action” on climate change but did not include any specific wording on cultivating a low-carbon economy.
This is despite a report tabled at the G20 finance ministers meeting advising countries on how to factor climate risk into both public and private investment.
Australia’s prime minister, Tony Abbott, has previously expressed a desire for the annual meeting to focus solely on job creation measures and resisted attempts by other countries to include the issue of climate change on the agenda.
Those in favour of the matter being discussed in Brisbane have pointed to the need for the largest economies to reach a compromise ahead of next year’s climate conference in Paris, which aims to agree new and binding carbon-reduction targets.
The Institutional Investor Group on Climate Change (IIGCC), which earlier this year called on governments to create a regulatory environment conducive to low-carbon investments, last week called for the topic of climate change to be part of the G20 agenda in Brisbane.
The organisation’s chief executive Stephanie Pfeifer said leaders of the world’s largest economies should seize the momentum building in the wake of the US government’s joint announcement with China to cut carbon emissions and emphasise the importance of a global agreement.
“Politicians have said the focus of the G20 is jobs, growth and security,” Pfeifer said. “Tackling climate change by moving to a low-carbon economy provides an opportunity to deliver all three.
“Global investors need strong political signals about the direction of travel on climate change in order to invest in low-carbon assets. World leaders should not waste the opportunity to send these signals this weekend.”
The OECD will be holding a conference on long-term investment policy in Paris on 26 November
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