Pension and superannuation funds face an increasing campaign of scrutiny as negotiations between the independent Asset Owners Disclosure Project (AODP) and global investor groups on climate change break down.
AODP had been working to secure collaboration with the industry groups to support the AODP, the world’s only independent disclosure and ratings framework on climate change.
“Given the magnitude and urgency of the climate challenge, this rejection by the Investor Groups is disappointing and dangerous from an industry that should be much more transparent and accountable to its members” said AODP Chair Dr John Hewson AM.
“It is time for these climate Investor Groups to help walk the talk within their own industry as despite some useful advocacy real material disclosure from funds has hardly moved forward at all.”
AODP presented proposals to the groups in a London summit in July to create an industry supported but independent framework that would encourage debate and best practice on how the asset owners manage climate risk in the medium and long term interests of peoples retirement savings.
The Investor groups, who are the IIGCC in Europe, INCR in the USA and IGCC in Oceania. and have several trillion of funds in their membership including many funds who are perceived to be leaders in managing climate risk.
Hewson Added “How is it other than hypocritical for these groups to demand independent disclosure of the companies they invest in, but when it comes to their own transparency, to want to play by a different set of rules? Also, they cannot continue to be gatekeepers for reluctant funds who may be members of these types of organisation but are actually doing very little to invest more responsibly”
“These are the same groups that have been working with the successful and important Carbon Disclosure Project that seeks independently managed disclosure from companies on similar issues. We urge their members individually to now disassociate themselves from this lack of openness, and work with ourselves and civil society to publicly demonstrate who is really acting over climate change and who is not”
AODP Executive Director Julian Poulter said, “The tragedy is that, while governments are at best tentatively introducing various schemes to price carbon and to otherwise reduce emissions, these Investor Groups have a unique opportunity to ensure portfolios are better balanced in a climate risk sense and in the process create a sizable shift in capital to the low carbon economy.
“Such a shift, even just to hedge their portfolio risk, could be enough to help underwrite an adequate global response to climate change.”
Dr Hewson added “Pension and supperannuation funds need to begin by being absolutely transparent about how they manage climate risk, and to admit to the carbon intensity of their investments and their plans to survive a possible forthcoming carbon crash. They may have escaped scrutiny over the sub-prime crisis but we have to ensure they don’t remain inactive over an even bigger systemic issue”
The Asset Owners Disclosure Project issued disclosure requests to the world’s largest 1000 Asset Owners in August and will publish its first global index of funds in November. The AODP is chaired by former leader of the Australian conservative Liberal Party Dr John Hewson AM with Board members including the General Secetary of the ITUC Sharan Burrows, the former head of risk at Goldman Sachs Bob Litterman and Dr Andrew Hilton OBE, Director of the London based Centre for the Study of Financial Innovation.