A group of international insurers with over $1.2 trillion in assets under management have urged the world's governments to commit to the phasing out of fossil fuel subsidies by 2020.
Ahead of next month's G-20 leaders' summit in China, Aviva, Aegon NV and MS Amlin signed a joint statement which called on G-20 governments to "establish a deadline for the phase out of fossil fuel subsidies and public finance for fossil fuels." The Institute and Faculty of Actuaries and Open Energi, a U.K.-based energy company, were the other signatories to the statement.
"Making a profit is essential in business," Mark Wilson, chief executive of Aviva, said in a media note on the Overseas Development Institute's (ODI) website. "But we will only be in business in the future if we act sustainably and create wider long term social value. That's just good business – and not acting sustainably is very bad business indeed."
"Climate change in particular represents the mother of all risks – to business and to society as a whole," Wilson added. "And that risk is magnified by the way in which fossil fuel subsidies distort the energy market. These subsidies are simply unsustainable."
Research by the ODI and Oil Change International has revealed that G20 nations spend $444 billion annually to "support fossil fuel production."
Wilson went on to state that energy subsidies should be used to create a "sustainable future through the social, environmental and economic objectives set out in the UN Sustainable Development Goals."
The statement from the insurers comes after last year's landmark COP21 summit in Paris. There, global leaders agreed to make sure global warming stayed "well below" 2 degrees Celsius and to "pursue efforts" to limit the temperature rise to 1.5 degrees Celsius.
"These subsidies fuel dangerous climate change," Shelagh Whitley, lead research fellow working on subsidies at the ODI, said. "If we are to have any chance of meeting the 2C target set at the Paris climate summit then governments need to start a programme of rapid decarbonisation," she added.