An influential group of European and Australian investment and pension funds have today issued fresh calls for world leaders to deliver progress at the UN's climate change talks in Bali, insisting that a clear climate change framework is essential to protect their investments.

In a letter to the heads of state of major economies and the heads of delegations in Bali, the Institutional Investor Group on Climate Change (IIGCC) argued that "credible and effective climate policy is critical for protecting and enhancing the value of their investments" .

The group – which includes Schroders, BNP Paribas Asset Management, AMP Capital Investors, Suncorp Investment Management, and a number of UK local government and public sector pension funds – called for an early agreement on a post-Kyoto policy framework that would give investors adequate time to respond to the risks and opportunties posed by climate change and new global regulations.

In the letter, the group call for agreement for such a framework to be finalised by December 2009 at the latest and argue that it should include clear targets for stabilising climate change, "ambitious" emission reduction targets and a significant expansion of the embryonic global carbon market.

Joanne Saleeba, executive director of the group in Australia and New Zealand, said that an agreement was "critical" to the group's members, which together represent close to €4tr in assets.

"Investors need clarity about the long-term policy framework directed at reducing carbon emissions and encouraging adaptation," said IIGCC chairman Peter Dunscombe. "Without this, we cannot plan effectively how to channel investments towards a low-carbon economy."

Else Bos, chief executive of PGGM Investments, insisted that far from damaging investments, more stringent climate change legislation would help the investment community. "Ambitious greenhouse gas emission reduction targets for industrialised countries would support us in our efforts to take better account of climate change in our investment decision-making and help to safeguard our long-term investments," she said. "We believe that a robust policy framework is essential to give investors the confidence to mobilise the capital needed for a low-carbon economy."

The IIGCC is the latest in a line of business groups to call for substantial progress to be made at the Bali conference. Earlier this month, a group of 150 of the world's largest companies brought together by Prince Charles' Corporate Leaders Groups on Climate Change called for the UN to agree mandatory emission reduction targets and promote greater investment in clean technologies.