During its XI General Assembly held on 17 December 2012, in Little Rock, Arkansas, USA the Club de Madrid favorably considered and agreed to join forces with the P80 Group Foundation in pursuing the establishment of the Global Leaders for Climate and Sustainable Development Financing Action Initiative; as a means of furthering their commitment to address the challenges of climate change and the increasing shortages of key resources needed for development, including energy, water, food and clean air. To formalise this agreement, the Little Rock Accord was signed between the Club de Madrid and the P80 Group Foundation.
Drawing on the leadership and best practice experience of the Club de Madrid Members - more than 90 democratic former Heads of State and Government from over 60 countries - and building upon the work of HRH the Prince of Wales's P8/P80 Group of institutional investors, as well as the Club de Madrid’s own work in the Global Leadership for Climate Action (GLCA), a joint initiative of the UN Foundation and the Club of Madrid committed to addressing climate change challenges through the pursuit of an effective, efficient and equitable post 2012 climate regime, the Club de Madrid and the P80 Group Foundation propose the creation of a new task force - the Global Leaders for Climate and Sustainable Development Financing Action - that will act to mobilize political will to increase the role of public and private sector finance, more specifically that of pension and sovereign wealth funds, in driving low carbon, climate resilient, sustainable growth, especially in developing countries. Such finance is essential to profitably deploy existing technologies and address increasing shortages of key resources needed for development, including energy, water, food and clean air.
In close collaboration with selected experts and advisors and through this initiative, Club de Madrid Members, will work to strengthen and support the implementation of the P80 message on the development of possible solutions to climate and sustainable development financing through both the public and private sectors. Solutions such as those being proposed by the UK Department for International Development, the Asian Development Bank, the International Finance Corporation, the Inter-American Development Bank, the African Development Bank, and the World Bank. The Global Leaders for Climate and Sustainable Development Financing Action task force will also work to ensure that opportunities for further investment and the removal of barriers to large-scale capital deployment are catalyzed.
Between 2007 and 2009 the Club de Madrid and the United Nations Foundation worked hand in hand to mobilize political will and invigorate international negotiations towards the achievement of an effective, efficient and equitable post-2012 agreement on climate change. Building on the leadership experience of the Members of the Club de Madrid and the knowledge and expertise of the United Nations Foundation, the GLCA brought together six former heads of state, seven former heads of government, and 12 leaders from intergovernmental organizations and business and civil societies, from more than 20 countries. The GLCA was co-chaired by former Chilean President and then Club de Madrid President Ricardo Lagos, and United Nations Foundation President and former U.S. Senator Timothy E. Wirth and facilitated by Mohamed T. El-Ashry, Former CEO and Chairman of the GEF.
Throughout this exercise, the Club de Madrid and UN Foundation drew upon their networks to secure broad and inclusive input from governments, business, academia and civil society that informed GLCA deliberations and output. In September 2007, the GLCA task force agreed upon a Framework for a Post-2012 Agreement on Climate Change, clearly proposing four negotiating pillars - mitigation, adaptation, technology, and finance – all later reflected in the Bali Action Plan adopted in December 2007 during the UN Climate Change Conference that formally launched negotiations on a strengthened international deal on climate change. Four of the Club de Madrid Members – Ricardo Lagos, Gro Harlem Brundtland, Festus Mogae and Han Seung Soo – went to become UN Special Envoys on Climate Change, directly supporting UN Secretary General, Ban Ki Moon, in the lead up to the COP 13 in Bali until COP 15 in Copenhagen.
At around the same time, between 2007 and 2011, HRH Prince of Wales’s P8 Group brought together senior officials from leading public pension funds to discuss the development of actions relating to global issues, including climate change and sustainable development resources shortages.
The first meeting, held in November 2007, discussed the issue of climate change and its impact on the pensions sector. Subsequent gathering held between 2008 and 2011 allowed the pension funds to explore the requirements of public–private partnerships in investment opportunities. In 2009 the first $300 million green bond investment with the World Bank was announced. Further discussions and negotiations led to the pioneering development of funds by the Asian Development Bank (CP3 Asia) and the International Finance Corporation Catalyst Fund (CF).
In June 2010, the first P80 Summit was hosted by the National Pension Service of Korea in Seoul. This Summit brought together pension funds from the P8 Group with their counterparts from several developing countries and sovereign wealth funds, thus leading the P8 to become the P80, representing several trillion dollars of investable assets.
The Global Leaders for Climate and Sustainable Development Financing Action task force will thus bring the Club de Madrid and the P80 Group Foundation together to build upon the previous work that outlines the scale of investment needed in firms and projects specializing in renewable energy, energy efficiency, water treatment, increased food production and cleaner air to deal with key climate and sustainable development resource shortage issues.
Through the Global Leaders for Climate and Sustainable Development Financing Action Initiative, the Club de Madrid and its Members will join forces with the P80 Group Foundation to develop a series of activities and recommendations to:
This effort will lead to the ultimate objective: regulatory and structured support to enable pension funds and sovereign wealth funds to significantly and rapidly use their financial muscle to help provide the financing necessary to profitably deploy existing technologies to address climate challenges and resource shortages, including energy, water, food and clean air. This deployment of capital and technologies should highlight examples of scalable public-private partnerships useful for tackling climate challenges, resource shortages and sustainable development objectives at globally required levels.
Pension funds (and insurance companies) are considered a prime source of potential investment because their long-term horizons are ideal for investing early and consistently in companies and projects that will produce profitable solutions.
The Club de Madrid and its Members are uniquely positioned to support and lend independent, practical, strategic leadership support to this initiative. During its more than 10 years of existence, this unique forum of democratic former Heads of State and Government has offered strategic and independent advice to key national and international stakeholders, in different areas relevant to the present proposal, among these, Climate Change Negotiations, Universal Access to Clean Energy, and key issues under discussion in the G20 such as food security and innovative financial mechanisms to fund climate action and sustainable development.
The first action of this initiative was a thematic dinner that took place on 16th December in Little Rock, Arkansas, on the occasion of the XI Club de Madrid General Assembly. During this dinner, the P80 Group Foundation presented the imitative to Club de Madrid Members and key stakeholders (representatives from Development Banks, Foundations, International Institutions, etc.). An open discussion followed the presentations where Club de Madrid Members expressed their view points on the importance of this initiative to catalize funds towards climate change and sustainable development investments. You can see the dinner video below this text.