Investment Managers Still Lagging in Response to Climate Change
California State Teacher's Retirement System (CalSTRS) $130 B
"As a long-term investor, CalSTRS wants to invest in well-managed companies that can address the physical risks of climate change and adapt to the changing regulatory and market realities of a carbon-constrained economy," said Jack Ehnes, chief executive officer of CalSTRS, the nation's second largest public pension fund, with more than $130 billion of assets under management. "Our asset managers need to ask the right questions and critically evaluate how companies are positioned so that we’re sure that our investments will produce outstanding risk-adjusted returns for our members."
The survey was done at the request of the Investor Network on Climate Risk, a network of 80-plus pension funds and other institutional investors who rely on asset managers to manage their investment portfolios. Eighty-four asset managers managing $8.6 trillion in assets completed the survey, including 66 in the P&I top 500 list and 18 others who responded at the specific request of INCR client members.
In summary, the survey found only a few asset managers – MFS Investment
Management and F&C Asset Management plc, among those – that are including
climate risks and opportunities throughout their investment analysis – in their
asset allocation, portfolio valuation, and corporate governance due diligence. Like
companies that are rethinking and retooling their business strategies in response to
climate change, these asset manager leaders are positioning themselves to capture
the opportunities and understand and manage the risks of climate change across
their portfolios.
The vast majority of respondents, 84 asset managers managing $8.6 trillion
completed the survey, including 66 in the P&I 500, are in the preliminary stages
of including climate risk in their due diligence.
