Accelerating the shift to climate-safe finance
Cities are redirecting capital from fossil fuels to thriving green economies.
Financial markets are starting to feel the effects of climate risks linked to fossil fuel investments[1]. In contrast, clean energy sectors offer better long-term growth. This creates challenges and opportunities for cities managing large financial portfolios through municipal investments and pension funds.
Cities have significant capital to support this investment shift. The 21 cities in the C40 Clean Investment Accelerator hold over USD 1 trillion in pension fund capital and municipal finance, opening up vast resources that can be directed toward climate goals while possibly boosting long-term returns.
These 21 cities are accelerating the move away from fossil fuel investments. Their goal is to cut fossil fuel use by half by 2030. This effort aims to build resilient economies that safeguard communities from climate risks and create good green jobs through smart clean investments.
Key achievements of the Accelerator so far:
- USD 81 billion of municipal finance is now fossil fuel-free
- Over USD 42 billion of city pension fund capital is being invested in renewables and green, job-creating climate solutions
- 18 public pension funds across 14 cities, responsible for over USD 1.4 trillion, have policies in place to scale up green investments and/or divest from fossil fuel companies
Why cities are driving clean investment transitions
Fossil fuel investments present increasing financial risks to portfolios
Fossil fuel assets have shown declining returns while facing mounting regulatory, physical, and transition risks. Cities managing long-term pension funds and municipal investments need strategies to protect their portfolios from stranded assets and volatile commodity markets while pursuing stable returns.
Clean energy investments offer stronger growth potential and job creation
Renewable energy and green infrastructure sectors demonstrate robust growth trajectories with improving cost competitiveness. Cities investing in these sectors can access expanding markets while supporting local economic development and creating employment opportunities in growing industries.
Investment alignment supports multiple policy objectives simultaneously
Aligning investment with climate goals can serve several purposes at once. By choosing cleaner strategies, cities protect pension holders’ savings, back economic development and cut emissions. Taking this joined-up approach helps address environmental, financial, and social priorities together.
Clean investments advance equity and community resilience
Clean investment strategies can prioritise projects that benefit underserved communities while advancing climate goals. Cities can direct capital toward initiatives that create accessible jobs, improve local infrastructure, and reduce environmental burdens in historically disadvantaged neighbourhoods.
What cities commit to through the C40 Clean Investment Accelerator
Cities that join the C40 Clean Investment Accelerator commit to redirecting capital from fossil fuels to climate solutions within five years of signing and by 2030 at the latest.
Target 1: Divest from fossil fuels and invest in climate solutions
Cities will take all possible steps to remove and stop investments in fossil fuel companies from city assets (investments, cash assets, reserve funds, trusts) and increase financial investments in climate solutions that create good jobs and a just, green economy.
Target 2: Advocate for clean and sustainable finance
Cities will advocate for clean and sustainable finance by other investors and all levels of government, including promoting strong climate policies, publicly advocating for an end to fossil fuel finance, and engaging with other mayors on collective calls for fossil-free finance.
Target 3: Influence pension fund investments
Where applicable, cities will call on city pension funds to develop policies that remove fossil fuel investments, increase climate solution investments, adopt net zero commitments with credible frameworks, and provide regular progress reports on climate-related financial risk management.
Cities committed to the Clean Investment Accelerator
Amsterdam, Auckland, Berlin, Boston, Bristol, Cape Town, Copenhagen, Durban (eThekwini), Glasgow, Jakarta, London, Milan, Montréal, New Orleans, New York, Oslo, Paris, Pittsburgh, Rio de Janeiro, Seattle, Vancouver
Questions about the Clean Investment Accelerator?
Contact cleaninvestment@c40.org for information on commitment requirements, implementation strategies, and participating cities.
Resources
Related
Cities play a powerful role in driving investment that can shape the transition to a greener economy and more equitable society. C40 supports cities to divest their pensions and investments from fossil fuels, shift towards climate solutions and advocate for investments in the future we want.
Commitments by C40 cities to drive ambitious climate results and halve fossil fuel use by 2030.
Discover how mayors and cities worldwide are delivering on their commitments to take urgent climate action through C40’s High-Impact Accelerators.
