One of the main goals of the Paris agreement is to mitigate global warming. Addressing climate change is not just for world leaders who met in the COP, but for every person in the world, based on the fact that we are all contributors to climate change. Investors are major contributors to climate change. Based on that a question arises: Are investors ignoring climate change or are they aware of it?
Just under a fifth of the top investors, or 97 managing a total of $9.4 trillion in assets, were taking tangible steps to mitigate global warming, a report by the Asset Owners Disclosure Project (AODP), a not-for-profit organization aimed at improving the management of climate change, found.
The study, published on Monday, showed that almost half of the world’s top 500 investors are doing nothing to address climate change through their investments, which include investing in low polluting assets or encouraging the companies they invest in to be greener.
But the “first steps” are being taken towards addressing climate change by 157 investors who are managing a total of $14.2 trillion, while 246 investors managing $14 trillion were doing nothing at all, the report said.
AODP Chief Executive Julian Poulter listed in a statement that “It is shocking that nearly half the world’s biggest investors are doing nothing at all to mitigate climate risk,” he said, adding pensions funds and insurers that ignore climate change were “gambling with the savings and financial security of hundreds of millions of people”.
The AODP rates the world’s 500 biggest pension funds, insurers, sovereign wealth funds, foundations and endowments, which collectively manage $38 trillion in assets, on their success at managing climate risk within their portfolios.
Best-performing was Britain’s Environment Agency Pension Fund, with $3.96 billion in assets.
IIGCC
On the other hand, we saw that it was important to highlight the role of “The Institutional Investors Group on Climate Change” (IIGCC), which is a forum for collaboration on climate change for investors.
“IIGCC” provides investors with a collaborative platform to encourage public policies, investment practices, and corporate behavior that address long-term risks and opportunities associated with climate change.
It pursues its mission through two strategic objectives:
- Changing market signals by encouraging the adoption of strong and credible public policy solutions that ensure an orderly and efficient move to a low carbon economy, as well as measures for adaptation.
- Informing investment practices to preserve and enhance long-term investment values.
