Some of the world’s largest and best known investors continue to make a big gamble on accelerating climate change by investing in heavily carbon-exposed assets, while only a small minority are blazing a trail to a safer, low-carbon world.
The AODP Global Climate Index is the world standard for assessing the world’s largest investors on climate-risk management. The 2015 Index and Report has been produced by assessing the world’s largest 500 asset owners including pension funds, sovereign wealth funds, insurance companies, foundations and endowments.
Some key insights from the index include:
- Only 7% of assets owners are able to calculate their emissions
- Only 1.4% of asset owners have reduced their carbon intensity from the previous year
- Only 2% of asset owners have an emissions intensity reduction target for next year
- No fund (including those who have actually partially divested) has yet calculated their portfolio wide fossil fuel reserves exposure
Asset Owners hoping that policymakers bail them out of their climate risks need a reality check. These funds have a duty to mitigate portfolio risk against continuing political intransigence. It is now up to every pension fund member or insurance company shareholder to drive their funds into copying that model and taking the world into a safer climate. -John Hewson, Chair, AODP
The third annual Asset Owners Disclosure Project (AODP) index of the top 500 global asset owners found that nearly a half of the funds surveyed (232) did absolutely nothing to protect investments under their stewardship from the threat of climate change.
The index lists the climate performance of the world’s largest 500 asset owners, including pension funds, insurance funds, sovereign funds, foundations and endowments. Together these funds own most of the assets in our global economy, amounting to nearly $40 trillion.
Funds rated A or higher in the index are protecting their investments by engaging with the companies they own, divesting of heavily carbon-exposed assets, or deploying hedging strategies. The laggards – those rated D or X – have simply failed to calculate the odds of a “sub-clime” crisis. They’re betting around 20-1 that either the fossil fuel company influence will last forever, or that their fund managers will bail them out of a crisis. – Julian Poulter, CEO, AODP