The AODP Global Climate Index provides stakeholders with a ranking and rating to indicate how each major asset owner performs in managing their exposure to climate risk. The objective of the survey is to encourage integration of climate change capability in portfolio management across the investment sector.
The survey comprises 41 questions covering the following three key areas assessing the asset owner’s capability in managing portfolio climate risk:
- ENGAGEMENT / The degree to which asset owners transparently disclose information to and actively engage with the general public and the investment chain: i.e. their members and stakeholders, investment consultants, asset managers and investee companies.
- PORTFOLIO CARBON RISK MANAGEMENT / How effectively asset owners are measuring, monitoring and managing climate change risks within their portfolios.
- LOW-CARBON INVESTMENT / The extent of any low-carbon investments held by the asset owner.
The ratings are based on a mixture of publicly available information and asset owner disclosures. The world’s largest long-term investors (pension funds, insurers, sovereign wealth funds, foundations and endowments) with at least USD2 billion assets under management were invited to participate in this year’s survey. Survey responses were used to rank and rate the asset owners to create the AODP Global Climate Index. The top 500 asset owners (by AUM) that decline the invitation to participate were researched by our team of analysts and assessed using publicly available information or information provided to us by their members or stakeholders. Asset owners are rated from AAA through to D grade, with an additional X category for those asset owners that appear to be doing absolutely nothing to manage climate risk.
Asset owners are scored on actions implementing elements of climate risk best practice in their investment process.