LONDON: Four Gulf states, including Saudi Arabia, are among the six major oil-producing countries to put their names to a climate charter designed to promote green investment and drive low-carbon economic growth.
The sovereign wealth funds of Saudi Arabia, the UAE, Kuwait, Qatar, Norway and New Zealand, which together are worth more than $3 trillion, have established a joint framework designed to encourage companies they invest in to address climate challenges and incorporate environmental policies into their future business plans.
The heads of the funds met with French President Emmanuel Macron and Norwegian Prime Minister Erna Solberg at the Elysee Palace in Paris on Friday to put their names to the pledge.
The signatories say in the charter that the transition to a low-carbon economy will help to create new investment opportunities and could help finance the shift toward clean energy sources down the line.
These countries “see a great commercial interest along the way, because they are saying that they think low-carbon economy is the future,” said Lawrence Yanovitch, who is the coordinator of the working group of the six sovereign funds
The development builds on discussions during a climate summit in Paris last year, when world leaders, investment funds and energy magnates promised to channel more resources toward tackling climate change.
The summit followed the rejection by US President Donald Trump of the 2015 Paris climate accord, which achieved a consensus among almost 200 countries on cutting greenhouse gas emissions and curbing global warming.
In the framework, the funds said they aim to “promote better informed decisions, thereby contributing to a smooth transition to a more low-emissions economy.”
Gulf states are already taking steps to mitigate climate change and transition toward low-carbon economies. Saudi Arabia’s Vision 2030 lays out the country’s renewable energy targets as it seeks to phase-out fossil fuels and reduce its annual emissions by up to 130 million tons of carbon dioxide emissions by 2030.
The Kingdom’s sovereign wealth fund, known as the Public Investment Fund (PIF) — worth $230 billion — is key to plans to diversify the Saudi economy.
Regional funds have been boosting their investments in the renewables sector as solar projects, in particular, gather pace across the Middle East.
The PIF last week upped its stake in utility ACWA Power which has rapidly grown to become a major developer of solar power projects.
It recently achieved the lowest contracted solar tariff in the world for the 300MW Sakaka PV project, the first ever utility scale solar power project in Saudi Arabia.