The fifth AODP Global Climate 500 Index launches after a year of rapid developments in articulating the financial risks of climate change to the global economy.
Climate risk rose further up the investor agenda in 2016. The Paris Climate Agreement came into force in November, including a recognition that financial flows must be aligned with the commitment to keep climate change well below 2C. Regulatory change is on the agenda, with France implementing a worldfirst mandatory climate risk disclosure requirement for institutional investors and the Task Force on Climate-related Financial Disclosures delivering its recommendations to the Financial Stability Board, for consideration by the G20 in July this year.
The scales have tipped – a 60% majority of Asset Owners, and half of Asset Managers are now taking action to manage the risks and opportunities posed by climate change.
The 2017 Global Climate 500 Index covers the Top 500 asset owners globally with $40 trillion AUM. Upping the ante:
- 201 X-rated Laggards, a 18% fall in those ignoring climate risk, a clear minority.
- 17 AAA rated Leaders up from 12 last year, the largest AAA gain in AODP Index history.
- Challenger group rated B-BBB sees the most significant increase, up 36% to 34, again a record.
- 112 rated C and above, a 16% rise in those taking tangible action.
Climate change is now a mainstream concern throughout the investment community, and activity is gathering unstoppable momentum. A 60% majority of asset owners recognise the financial risks – and opportunities – of climate change, and are taking action, with growing numbers scaling up their activities to achieve A, B and C ratings. Asset managers are well placed to meet their growing demands. All but three of the top 50 are taking some action, and as a whole they are performing better than asset owners.
Asset Manager Highlights:
The new 2017 Global Climate Index for Asset Managers covers the top 50 asset managers globally with $43 trillion AUM.
- Two Leaders rated A or above, both European.
- Only three X rated Laggards – just 6% of the Index – far greater recognition of climate risk than asset owners.
- Challengers, rated BBB-B, account for 16% of the Index.
- 46% are taking tangible action on climate-related investment risks and opportunities, rated C or above.
- 24 rated D, just under half the Index (48%), are taking first steps to acknowledge climate related financial risk.
The report, Global Climate Index 2017: Rating the world’s investors on climate related financial risk, can be downloaded above.