* Commission has issued 2030 policy discussion document
* Debate on firm policy goals displaced by cost worries
* Major investment decisions must be taken before 2020
BRUSSELS, June 27 (Reuters) - Pensions, insurers and other funds responsible for 7.5 trillion euros ($9.75 trillion) in assets said investment is likely to shun the European Union unless it can draw up new energy and climate policy before the end of the year.
Representing more than 80 of Europe's largest investors, including HSBC Investments, Mercer Global Investments Europe and the BT Pension Scheme, the group on Thursday urged the EU executive not to delay draft law on 2030 policy.
"The longer the delay, the more investors will start to doubt Europe's resolve to make its low carbon roadmap a reality," Craig Mackenzie, head of sustainability at Scottish Widows Partnership, said in a statement.
Mackenzie is also board director of the Institutional Investors Group on Climate Change (IIGCC), which published its reaction to a European Commission document that launches the debate on how to follow climate and energy legislation after it runs out in 2020.
Without detailed policies, long-term investment needed for the multi-year planning cycles of the energy sector might not be forthcoming, the IIGCC said, adding its members are much better able to provide that than short-term financial markets.
The group helps to fund heavy industry, including chemicals and steel, as well as infrastructure for green energy.
To upgrade networks to absorb higher levels of renewable energy, the Commission, the EU executive, has estimated around 1 trillion euros is needed by 2020 and that figure rises to 7 trillion euros over the next 40 years, the IIGCC said.
Debate on the goals the Commission outlined early this year has been sluggish as financial crisis has prioritised cost, competitiveness and saving jobs over climate and energy policy.
Uncertainty has been aggravated by the collapse of the Emissions Trading Scheme (ETS), the European Union's carbon market, which is too weak to drive low carbon investment.
The European Union has been unable to agree on a rescue plan, although the European Parliament will hold another vote to try to resolve the issue next week.
The IIGCC wants structural reforms of the carbon market, as well as a 2030 goal for a 40 percent cut in carbon emissions compared with 1990 levels and a system to ensure investors always have a target 15 years ahead.
To achieve 2030 goals, major investment decisions must be taken before 2020, the group said, adding substantial progress on new law was needed before 2014 to ensure that happens.
In 2014, the European Union has a change of parliament and Commissioners, which creates a hiatus in the law-making process.
Commission officials have acknowledged the need for urgency.
They also hope 5.1 billion euros of EU money, set aside in the multi-annual budget for energy infrastructure, can lure further investment.
"We want to be able to (by the end of year) get energy markets back on track by a stable political framework up to 2030 with as much commitment as we can," Philip Lowe, a director general in the European Commission, said on the sidelines of a London conference.