Aviva Investors is calling for a new Bretton Woods conference in 2024 to mobilise private capital and reform the global financial system to prevent a climate disaster.
In a report published this week, the £353bn asset manager said that failure to do so would have "unprecedented" environmental, social and economic consequences, including the potential collapse of the financial system before the end of the century.
Mark Versey, chief executive at Aviva Investors, said: "The global economy and financial system are currently financing their own destruction because the global financial architecture is not fit for purpose."
He added: "We need key institutions in the architecture to create their own global transition plans for finance and to add climate considerations to the heart of their agenda."
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According to the firm, in response to the sharp increase in loss events, insurers and reinsurers have already increased premiums. Without insurance to control risk and mitigate losses, the entire financial system could become "unworkable".
"There is an estimated $510trn in global financial assets held by financial corporations. These institutions are committing to net zero at scale, but they cannot solve the problem on their own," Versey said.
Aviva Investors is "advocating bold change", he added, which would include the Bretton Woods institutions, the World Bank and the IMF, as well as all the regulators and supervisors of asset management, banking and insurance industries.
In the report, the firm recommends that all institutions overseeing global finance should create a 2050 net zero transition plan for their work, refresh organisational mandates to make climate a central focus and report annually on net-zero progress.
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Other recommendations include collaboration with others in the global financial architecture to create an overarching transition plan and the convention of a summit to agree and begin implementing reforms to tackle the climate emergency around the 80th anniversary of Bretton Woods.
"Finance needs proactive net zero leadership from its global regulators and standard setters if we are to evolve an effective paradigm for the next 80 years," Versey added.
Steve Waygood, chief responsible investment officer at Aviva Investors, said financial market participants are "hugely influenced" by their regulatory regimes and respond to signals from their supervisors.
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He argued that a clear focus on managing and mitigating climate risk, and on delivering a global transition plan for finance, will ensure those signals incentivise and support financial institutions.
"It will in turn encourage them to allocate capital towards companies committed to the transition and mobilise finance in support of mitigation and adaptation in countries around the world, especially in developing economies," he said.
"Without changing the regulatory regimes, the risk is that those actions will remain a second tier priority."
