The Asset Owners Disclosure Project (AODP) provides insights into the detailed data behind the 2015 AODP Global Climate 500 Index.

With the UNFCCC COP21 meeting in Paris nearly upon us, the economic and financial implications of climate change are coming to the forefront of the debate around the urgent need for a transition to a low-carbon economy.

Many asset owners have taken positive action to reduce the very real financial risk of investing in assets exposed to accelerating climate change. But many funds are lagging well behind what is necessary to ensure a transition to a low-carbon economy.

We discovered:

  • There are standout funds showing leadership in low carbon investment: the average for asset owners providing low-carbon investment data is 3.3 percent of portfolio assets under management (AUM);
  • 457 asset owners lack any information on low-carbon investment within their portfolios;
  • 13 percent of asset owners make a specific allocation for climate change-related investments as part of an overall hedging strategy;
  • Asset owners are engaging more with governments and policymakers rather than the companies that they own. Few incentivise their internal and external agents to manage climate change risk. This is particularly concerning in the pension fund industry, where the liability time horizon is decades into the future.

This report is a precursor to the launch of the 2016 AODP Global Climate 500 Index later this month. We hope it provides useful insights into the performance of leaders across out five ratings criteria, revealing the highest ranked asset owners across each area, sectors and regions, as well as the largest laggards by fund size.

“Our insights provide a fuller picture of the areas in which asset owners are the most proactive, as well as the variety of tools and strategies used to improve climate risk management,” said Julian Poulter, AODP CEO

“This level of detail allows asset owners to better understand their relative strengths and weaknesses in each area compared to peers, allowing them to create plans and strategies to catch up or move further forward,” he added.

The report, Digging Deeper: An In-depth Examination Of The 2015 AODP Global Climate 500 Index can be downloaded here.