Asset owners and asset managers are paying more attention to climate change, according to report

13 July 2009

The Institutional Investors Group on Climate Change, the European investors’ forum for collaboration on climate change, unveiled its second annual reports today which reviews the investment practices of signatories to the Investor Statement on Climate Change.

The report reveals significant progress on climate change made in 2008 among asset owners and asset managers, who in total represent €2tn in assets under management.

According to the findings of the report, institutions are paying greater attention to climate change, with 75 per cent of asset owners and over 80 per cent of asset managers referencing climate change in their investment policies.

One in two asset owners are now questioning their managers as to the process for integration within investment research, decision making and shareholder engagement, signaling an increase of 30 per cent from just over a year ago. Furthermore, 60 per cent of asset owners specifically consider the extent to which climate change is fully integrated into the investment process when appointing a new manager, and 70 per cent are monitoring their respective managers’ performance on climate change.

However, the number of pension funds instructing their advisors to consider climate change in their recommendations remains at below 40 per cent.

David Russell, co-head of Responsible Investment at the Universities Superannuation Scheme, said, ‘That institutional asset owners’ play a highly significant role in encouraging change in investment managers has never been in doubt, but what we can see from this research is that a majority of respondents are demonstrating leadership in this area; this a trend which we expect will become more pronounced in the future.’

Rory Sullivan, Head of Responsible Investment, Insight Investment, added, ‘Two important trends emerge from the report. First, the focus of investor research and engagement has broadened to encompass adaptation not just mitigation. Second, investors are paying more attention to downside risk, not just upside opportunity. In both cases, the overwhelming message from the report is the critical importance of public policy as a driver for corporate and investor action, and the reality that without strong and credible public policy we will struggle to make progress towards a low carbon
economy.’

The report indicates that 90 per cent of asset managers are engaging directly with companies on a wide range of climate-related issues, such as senior management responsibilities for climate change, integration into business strategies and improving corporate disclosure. However, findings show that investors need to pay more attention to encouraging companies to make absolute emission reductions.

Copyright © 2009 NewNet

Tags: clean energy, climate change, energy efficiency

This story was published on Monday, July 13th, 2009 at 5:53 pm and is filed under Europe, Features, companies, energy efficiency, news. You can follow any responses to article entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

One Response to “Asset owners and asset managers are paying more attention to climate change, according to report”

1. Fintan Whelan says:

   15 July 2009 at 10:35 am

   I am encouraged by this piece of news. it is movement in the right direction.
   however, as a renewables focused company in the middle of a fund raising, i have seen across the part of the institutional investment community with which I have come into contact precious little evidence of this trend in practice. This might be tactical, in that nobody is inclined to acknowledge the tangible portfolio benefits that renewables bring – little else in a partfolio is positively exposed to the future price of carbon.
   We will see how competitive tension will work on that in due course.
   But mostly this community needs to get familiar with developments in Offshore Wind in the North Sea. This is a massive, massive opportunity to put money to work.

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