Direct engagement of corporate climate policy rising, study shows
Investor concern over climate change and related policies climbed last year, with increased public reporting on climate issues, rising engagement of companies by investors and investors’ divestment of equities based on climate policies, according to a new global study.
Sixty-nine percent of asset owners took into account climate change policy when making fund management decisions last year, up from 43 percent in 2011, according to the poll commissioned by an international coalition of groups advocating greater awareness of climate change.
The survey of 47 asset managers and 37 asset owners based in 10 countries with a combined total of $14 tn in assets also shows that about 53 percent of asset managers made decisions to divest from or avoid a company because of investment policies related to climate change in 2012.
‘There are some extremely encouraging findings in this year’s report,’ says Stephanie Pfeifer, executive director of the Institutional Investors Group on Climate Change (IIGCC). ‘Despite the wider economic challenges, climate change is firmly established as a material risk for investors, and their assessment of climate risk is shifting investment decisions. Investors still face many challenges, however, not least the ongoing policy uncertainty that continues to make measuring long-term climate risk and emissions exposure difficult.’
Levels of public reporting in 2012 remained at the same levels as the previous year, with 56 percent of asset owners and 55 percent of asset managers saying they report publicly on their activities related to climate change. About 14 percent of asset owners and 21 percent of managers provide no reports at all, but the ‘vast majority’ of those owners plan to report for 2013, the study shows.
The report also shows that 72 percent of asset managers and 54 percent of asset owners have engaged directly with companies on issues of climate change and clean energy, and the related risks and opportunities. At the same time, 64 percent of managers and 69 percent of owners engaged with companies in collaboration with other investors.
‘Given that only the very largest asset owners have big-enough equity stakes in their portfolio companies to have an influence, pooling assets and resources is understandable,’ the study concludes. ‘But direct engagement by asset owners has increased by 20 percentage points on last year’s 34 percent, which reflects the importance placed on the activity and the value attributed to active ownership by asset owners.’
The survey was carried out by Mercer and commissioned by the Global Investor Coalition on Climate Change, the Asia Investor Group on Climate Change, the Investor Group on Climate Change, the Investor Network on Climate Risk and the IIGCC.
