These sustainability risks will have far-reaching economic implications that investors cannot ignore. In the decades to come, they will challenge businesses and affect investment returns across all asset classes. As recent events have shown, waiting to respond is not an option.

This Blueprint is written for the 21st Century investor— institutional asset owners and their investment managers—who need to understand and manage the growing risks posed by climate change, resource scarcity, population growth, human and labor rights, energy demand and access to water—risks that will challenge businesses and affect investment returns in the years and decades to come.

Showcasing dozens of real-world examples of investor engagement with companies, contributors cover issues like setting ESG standards in the marketplace, public policy engagement, collaboration, shareholder resolutions, board of director engagement, divestment, creating a focus list, strategies for international engagements, and other topics. The guide also features a set of ESG-themed questions that portfolio managers and analysts should be asking of companies in key sectors

With the active engagement and support of INCR members, we have accomplished much together over the past year. From helping bring the concept of Carbon Asset Risk into mainstream financial markets, to driving the formation of a Sustainability Working Group of leading global stock exchanges, to shareholder engagements resulting in an unprecedented 66 corporate commitments on climate and sustainability, INCR members have made the world a better place to live and to invest.

This proposal is the result of multi-year dialogues between institutional investors—including members of Ceres’ Investor Network on Climate Risk and signatories of the Principles for Responsible Investment—and stock exchanges around the world. Institutional investors are under heightened pressure from clients and beneficiaries to be responsible stewards of client assets, which means not only financial responsibility but also ethical responsibility for the impact of those assets on communities, workers, and the environment.

The key regulator that leads federal efforts to provide investors with information about corporate risks and opportunities is the U.S. Securities and Exchange Commission (SEC). At the heart of the SEC’s mission is the protection of investors through meaningful corporate reporting.

In 2010 world governments agreed to limit the increase in global temperature to two degrees Celsius (2 °C) above pre-industrial levels to avoid the worst impacts of climate change. To have an 80 percent chance of maintaining this 2 °C limit, the IEA estimates an additional $36 trillion in clean energy investment is needed through 2050—or an average of $1 trillion more per year compared to a “business as usual” scenario over the next 36 years.

These new investments in clean energy—including renewable energy such as solar, wind and geothermal, energy efficiency and energy smart technologies such as power storage, fuel cells and carbon capture and storage—will provide multiple benefits. In addition to cutting greenhouse gas emissions in half by 2050, such investment will yield significant returns in the form of reduced fuel costs. Total fuel savings are an estimated $100 trillion between 2010 and 2050. Moreover, the greater job-creation potential of energy efficiency and renewable energy relative to fossil fuels makes clear that quadrupling annual global investment in clean energy will create millions of new jobs worldwide.

Download the full report here.

This Ceres report provides 10 recommendations for investors, companies and policymakers to increase annual global investment in clean energy to at least $1 trillion by 2030—roughly a four-fold jump from current investment levels.

Business support and policy endorsements are powerful. They provide trusted perspectives on the economic costs and benefits of policy options. They can also influence others within their industry, supply chain, or customer base.

This report is designed to help companies inform and accelerate the policies most urgently needed to support a stable global economy. And it is designed to help businesses engage in national and international debates, with a view to contribute to political progress on reducing carbon dioxide (CO2) and other greenhouse gas (GHG) emissions, and adapt to disruptions in the global climate system.

Industry analysts have estimated the potential energy efficiency investment opportunity in the hundreds of billions of dollars. However, under current market conditions, institutional investors are largely unable to finance energy efficiency projects at the scale necessary to address climate change or to meet their own internal investment criteria. At sufficient size, a market for energy efficiency loans could present an attractive investment opportunity for institutions.

The report also recommends that water demand projections be viewed skeptically by credit rating agencies, investors and policymakers; that investors and credit rating agencies seek better understanding of how rate structures influence demand and revenue streams; and that environmental and consumer groups actively work to build public support for water rates that ensure future water security and affordability.