The Asset Owners Disclosure Project (AODP) has released the first ever global change investment index, showing how the world’s biggest investors are managing climate risk.

 

“This first survey of the world’s 1,000 largest retirement funds, insurance companies and sovereign wealth funds’ management of climate risks paints a disturbing overall picture of greenwash and reckless mismanagement but with some signs of progress,” said AODP Chair Dr John Hewson.

 

“With around $60 trillion under management the investment decisions made by these investors will be critical to a safe climate and our future prosperity. The survey found many funds didn’t even have a climate policy and many that did hadn’t changed investment decisions as a result.”

 

“With six of the top 10 funds, Local Government Super topping the list and being one of only two AAA rated funds in the world, Australian funds rank relatively well.”

 

The index was built following information requests to the world’s 1,000 largest asset owners including over 800 pension funds, 80 insurance companies, 50 sovereign wealth funds and 50 foundations/endowments.

 

The survey focused on five main categories – transparency, risk management, investment chain alignment, active ownership and low carbon investment. It includes asset owners from 63 countries, in all regions of the world.

 

Other key findings include:

  • Only South Africa’s Government Employees Pension Fund (GEPF) has calculated its exposure to fossil fuel reserves via the balance sheets of its investee companies. For this and other reasons GEPF is ranked second and is the only other AAA rated fund.
  • The ability of funds to respond to and to build capacity around climate change is not affected by size - in Australia, Local Government Super with $6.5bn under management is a real leader, while the Future Fund with $80bn didn’t even respond due to “inadequate resources”.
  • Leaders have a higher instance of walking the talk – putting their money where their mouth is and investing in low-carbon investment opportunities – as well as more frequently and publicly exercising their voting rights as shareholders and having a better grasp on how to monitor thei exposure to climate change related impacts.

 

The full report can be found here