This presentation summarises the results from world’s first global climate investment index showing how the world’s biggest investors, including superannuation funds, are managing climate risk.
For more information visit www.climateinstitute.org.au/articles/publications/aodp-global-climate-index-2012-results.html
Australia will face significant human and economic costs because its infrastructure is poorly equipped to handle more frequent extreme weather events and other consequences of climate change.
A new report by The Climate Institute, Coming Ready or Not: Managing climate risks to Australia’s infrastructure, gathers research on the physical impacts and consequences of climate change on major infrastructure across the property, electricity, road and rail and finance sectors. It examines the preparedness of businesses and governments to manage these risks and the steps needed to improve Australia’s climate readiness.
A new social media platform – The Vital Few - allows people to take back control of their future and make sure their pension funds are investing in ways that help tackle climate change.
This presentation summarises The Climate Institute’s report, Global Climate Leadership Review 2013. It provides an overview of Australian climate policy in a global context, as well as elaborating on the implications of global climate diplomacy and domestic actions for Australia. For more information, visit http://www.climateinstitute.org.au/global-climate-leadership-review-2013.html.
This document discusses how large institutional investors, as universal owners of diversified portfolios, are exposed to significant costs from environmental damage caused by the companies in their portfolios. It estimates that the annual global costs of environmental damage equal $6.6 trillion or 11% of global GDP in 2008. The top 3,000 publicly listed companies alone cause over $2.15 trillion in environmental costs annually, representing over 50% of their combined earnings. These externalities pose financial risks to investors by reducing future company cash flows and portfolio returns over the long term.
The Global Climate Leadership Review is an annual report that evaluates countries' leadership on climate change issues. It finds that Australia ranks poorly compared to other developed countries in terms of its capacity for a low-carbon economy. While Australia's Clean Energy Future package is a step forward, the report recommends that Australia commit to stronger emissions reductions under a new Kyoto agreement and pursue trading partnerships with other countries to boost global climate ambition.
This document summarizes the contributions and support provided for a research project on the implications of climate change scenarios for strategic asset allocation. It thanks the participating organizations and individuals that supported the project. It also includes quotes from several partners on why their organizations participated in the research and its importance. The quotes emphasize that climate change poses significant financial and economic risks for long-term investors and understanding its impacts on investments is crucial for fulfilling fiduciary duties. The research aims to help shape strategic thinking and better integrate climate change into investment programs, policies and risk management.
This presentation summarises The Climate Institute’s report, Climate Smart Super: Understanding Superannuation & Climate Risk, which examines the impact of climate and carbon risks on retirement and superannuation savings, especially in Australia. Superannuation funds are often Australians’ biggest or second biggest asset but until now very few have had accessible information enabling them to take an active role in managing that asset against climate and carbon policy risks. This report (and presentation) offers a number of simple steps to assist people to engage with their super funds so that they can move from being accidental to active investors and start challenging the dangerous short term focus in business and politics that threatens retirement savings. For more information, visit www.climateinstitute.org.au/climate-smart-super.html
Climate exposure is defined as the potential gains or losses in an investor’s portfolio due to climate change. It encapsulates both climate-related financial risks as well as opportunities. Though climate exposure has many components, it can be divided into three broad subcategories: • Policy and legal exposure: The financial effects of policies designed to mitigate climate change (e.g., carbon pricing schemes) or policies designed to adapt to it (e.g., water management infrastructure and rationing) (Burton, Diringer, and Smith 2006); or litigation or adjudication related to climate change (Massachusetts v. Environmental Protection Agency 2007; Guyatt et al. 2011). • Physical and ecological exposure: The financial implications of changes to earth’s ecosystems. For example: the costs of shorter and warmer winters on the ski industry (Bebb 2015); the financial impacts of hotter weather on agricultural yields; or the economic consequences of severe weather/climatic events (e.g., Hurricane Sandy) that disrupt human economic activity. • Market and economic exposure: Human responses to the aforementioned policy and ecological changes that will reshape businesses, industries, economies, and markets (e.g., growth in clean energy technologies that threaten the fossil fuel industry) (Guyatt et al. 2011).
Australia will face significant human and economic costs because its infrastructure is poorly equipped to handle more frequent extreme weather events and other consequences of climate change.
A new report by The Climate Institute, Coming Ready or Not: Managing climate risks to Australia’s infrastructure, gathers research on the physical impacts and consequences of climate change on major infrastructure across the property, electricity, road and rail and finance sectors. It examines the preparedness of businesses and governments to manage these risks and the steps needed to improve Australia’s climate readiness.
A new social media platform – The Vital Few - allows people to take back control of their future and make sure their pension funds are investing in ways that help tackle climate change.
This presentation summarises The Climate Institute’s report, Global Climate Leadership Review 2013. It provides an overview of Australian climate policy in a global context, as well as elaborating on the implications of global climate diplomacy and domestic actions for Australia. For more information, visit http://www.climateinstitute.org.au/global-climate-leadership-review-2013.html.
This document discusses how large institutional investors, as universal owners of diversified portfolios, are exposed to significant costs from environmental damage caused by the companies in their portfolios. It estimates that the annual global costs of environmental damage equal $6.6 trillion or 11% of global GDP in 2008. The top 3,000 publicly listed companies alone cause over $2.15 trillion in environmental costs annually, representing over 50% of their combined earnings. These externalities pose financial risks to investors by reducing future company cash flows and portfolio returns over the long term.
The Global Climate Leadership Review is an annual report that evaluates countries' leadership on climate change issues. It finds that Australia ranks poorly compared to other developed countries in terms of its capacity for a low-carbon economy. While Australia's Clean Energy Future package is a step forward, the report recommends that Australia commit to stronger emissions reductions under a new Kyoto agreement and pursue trading partnerships with other countries to boost global climate ambition.
This document summarizes the contributions and support provided for a research project on the implications of climate change scenarios for strategic asset allocation. It thanks the participating organizations and individuals that supported the project. It also includes quotes from several partners on why their organizations participated in the research and its importance. The quotes emphasize that climate change poses significant financial and economic risks for long-term investors and understanding its impacts on investments is crucial for fulfilling fiduciary duties. The research aims to help shape strategic thinking and better integrate climate change into investment programs, policies and risk management.
This presentation summarises The Climate Institute’s report, Climate Smart Super: Understanding Superannuation & Climate Risk, which examines the impact of climate and carbon risks on retirement and superannuation savings, especially in Australia. Superannuation funds are often Australians’ biggest or second biggest asset but until now very few have had accessible information enabling them to take an active role in managing that asset against climate and carbon policy risks. This report (and presentation) offers a number of simple steps to assist people to engage with their super funds so that they can move from being accidental to active investors and start challenging the dangerous short term focus in business and politics that threatens retirement savings. For more information, visit www.climateinstitute.org.au/climate-smart-super.html
Climate exposure is defined as the potential gains or losses in an investor’s portfolio due to climate change. It encapsulates both climate-related financial risks as well as opportunities. Though climate exposure has many components, it can be divided into three broad subcategories: • Policy and legal exposure: The financial effects of policies designed to mitigate climate change (e.g., carbon pricing schemes) or policies designed to adapt to it (e.g., water management infrastructure and rationing) (Burton, Diringer, and Smith 2006); or litigation or adjudication related to climate change (Massachusetts v. Environmental Protection Agency 2007; Guyatt et al. 2011). • Physical and ecological exposure: The financial implications of changes to earth’s ecosystems. For example: the costs of shorter and warmer winters on the ski industry (Bebb 2015); the financial impacts of hotter weather on agricultural yields; or the economic consequences of severe weather/climatic events (e.g., Hurricane Sandy) that disrupt human economic activity. • Market and economic exposure: Human responses to the aforementioned policy and ecological changes that will reshape businesses, industries, economies, and markets (e.g., growth in clean energy technologies that threaten the fossil fuel industry) (Guyatt et al. 2011).
160416 Should the prevention of long term climate change be put before the de...Sam Norman
The document discusses whether preventing long-term climate change should take priority over the development of LEDCs. It argues that preventing LEDC development in the short-term could help limit global temperature rise to under 2°C by reducing greenhouse gas emissions. However, there are significant ethical issues and challenges with implementing this strategy. International cooperation would be required but has often failed due to voluntary components and inadequate funding in climate agreements. Complete prevention of development would also be difficult and prolong living conditions in LEDCs that include high mortality rates and lower life expectancy.
Paradigm shift a survey of key natural resources cahllengessDr Lendy Spires
1. The speaker discusses the need for a new paradigm in natural resource decision-making that fully considers balancing environmental, social, and economic benefits.
2. He asserts that some regional agreements, certification systems, and public-private partnerships are beginning to test this new collaborative approach.
3. Addressing major challenges like urgency, complexity, and need for innovation will require "Sustainability 3.0" - collaborative leadership across sectors to develop solutions.
Since 2007, The Climate Institute has conducted comprehensive quantitative and qualitative research into Australian attitudes to climate change and its solutions. We have published a number of Climate of the Nation reports and aim to publish annual mid-year reports to track evolving attitudes and actions.
More information can be found on The Climate institute's website:
www.climateinstitute.org.au/climate-of-the-nation-2012.html
Financial institutions play a critical role in our economy. They are the front line in managing all financial risks, including those posed by climate change. The stability of our economy and financial system as a whole will depend on how quickly and deeply financial institutions adapt to the risks faced by the Australian economy from climate change.
Even though many asset owners have made commitments to responsible investment, the majority have yet to ensure that these are effectively implemented. There are inconsistencies in investment practices in different asset classes, high-level statements on sustainability or environmental, social and governance issues are often missing from investment beliefs, and responsible investment commitments are not embedded in investment mandates.
This creates a multiplier effect throughout the investment market. Weak implementation of responsible investment by individual asset owners sends signals to the investment market as a whole that responsible investment is not a priority for asset owners. In turn, this limits the willingness of investment consultants and investment managers to focus on responsible investment and ESG issues in their products and in their advice.
By implementing their commitments to responsible investment with sufficient scale and depth, asset owners can accelerate the development of responsible investment through the investment chain.
Philanthropy for the Climate-Change Challenge with John P. Holdrenpackard343comm
Dr. John P. Holdren, Assistant to the President for Science and Technology, Director of the White House Office of Science and Technology Policy, and Co-Chair of the President's Council of Advisors on Science and Technology (PCAST), presented to the David and Lucile Packard Foundation's Board of Trustees on the state of climate policies and action in the United States and worldwide. The Packard Foundation is deeply invested in climate change mitigation efforts and welcomed the opportunity to discuss with Dr. Holdren where philanthropic funding may have the most impact.
Today, CO2 emissions from fossil fuels are around 50 per cent higher than they were 20 years ago, and have been rising each year. This kind of change to the chemical mixture in the air doesn’t come without consequences. Acting like a blanket, the build-up of greenhouse gases is the main reason why the average global temperature has risen by nearly 1°C in the last century. This booklet explains why a rise of only a few degrees in the average global temperature risks our prosperity, security, and health. It explains why it is so important to reverse the rise in emissions within the decade. And why it is still within our means to do so. For more information visit www.climateinstitute.org.au/dangerous-degrees.html
Climate Action: the need for a systemic approachESD UNU-IAS
Keynote Lecture #2 - 2021 ProSPER.Net Leadership Programme
"Climate Action: the need for a systemic approach", presented by Prof. Lauren Rickards (ECP Director, Urban Futures, RMIT University) at the 2021 ProSPER.Net Leadership Programme, 15 September, 2021.
As the recent National Climate Assessment made clear, extreme weather events—including heat waves, drought, tropical storms, high winds, storm surges, and heavy downpours—are becoming more severe. In many places these risks are projected to increase substantially due to rising sea levels and evolving development patterns, affecting the safety, health, and economy of entire communities. Extreme weather events like Hurricane Sandy have made it clear that we remain vulnerable to such events in spite of advances in disaster preparedness. American communities cannot effectively reduce their risks and vulnerabilities without including future extreme events and other impacts of climate change in their planning both before and after a disaster, and in everyday decision-making.
Why Nations Fail: The Origins of Power, Prosperity, and
Poverty”. The Committee will continue its work on international
This document provides a summary of the November 2012 issue of trade and development, macroeconomic policy questions,
the UN DESA newsletter. It discusses several topics, including: eradication of poverty, operational activities for development,
and sustainable development.
1) An interview with the Foreign Minister of Seychelles about the
unique challenges faced by Small Island Developing States and The Social, Humanitarian and Cultural Committee (Third
hopes for the upcoming 2014 conference on sustainable Committee) opened on 9 October with a keynote address by
development of SIDS.
1) The AIACC project studied climate change adaptation across many developing world regions. A key lesson is to adapt to climate impacts now to avoid greater costs later ("a stitch in time saves nine").
2) Current climate hazards already cause significant damages, demonstrating an "adaptation deficit" that climate change will worsen if left unaddressed. Acting now can yield immediate benefits and enable longer-term adaptation.
3) Other important lessons include: integrating adaptation with development; increasing knowledge about climate risks and responses; strengthening institutions; protecting degraded natural resources; providing financial assistance; involving at-risk communities; and using place-specific adaptation strategies tailored to local conditions.
Climate Change - An Approach to a One-Australia PolicyRichard Hodge
Climate change is the world\'s biggest political problem, and there is no framework to deal with it.
This proposal examines how a \'systems\' approach can develop a framework for action based on inclusive (not divisive) consideration of all issues.
Paul Marquis, the education coordinator for NEXUS Green Building Resource Center, discusses green-building economics, life-cycle costing and total cost of ownership, and rebate and incentive programs available to homeowners.
Environmental sustainability and economic growthSyed Aslam
The document discusses whether environmental sustainability and economic growth can go together. It argues that they are interrelated and countries need to strike a balance between the two. While developing countries focus on growth through industries, this often leaves the environment neglected. However, with collective global efforts like conferences and protocols to reduce emissions, countries are working to resolve this issue. India is presented as an example of a developing country that is seriously addressing environmental sustainability while still experiencing economic growth.
The document outlines solutions for Australia to address climate change, including reducing greenhouse gas emissions 60% by 2050, establishing an emissions trading scheme, and all Australians taking responsibility to use energy more wisely. It argues that decisive action is needed now to lower the risks of climate change, which is already occurring in Australia through rising temperatures, changing rainfall patterns, and more extreme weather events. The solutions proposed aim to both lower emissions and adapt to the impacts of climate change while also creating new business opportunities in clean energy.
The document discusses the role of emergency managers in addressing climate change. It provides definitions for key terms like mitigation, adaptation, and resilience. While emergency managers typically focus on short-term acute hazards, climate change involves chronic impacts that require longer-term planning. The document argues emergency managers should have a seat at the table in discussions around climate change adaptation due to their expertise in risk reduction and building community resilience.
22. TCI Climate of the Nation Flagship Report 2012Richard Plumpton
This document summarizes the findings of a report on Australian attitudes toward climate change in 2012. It was conducted through focus groups and surveys between April and May 2012, a time of highly politicized debate around climate change policies in Australia. The research found that Australians were uncertain about the science of climate change, unconvinced by carbon pricing solutions due to fears over rising costs of living, and had lost confidence in experts and governments on the issue. However, attitudes remained fluid and could still be influenced on both the reality and solutions regarding climate change.
This document summarizes a report about understanding the relationship between climate risk and superannuation (retirement) funds. It discusses how climate change poses risks to investments and the global economy. Superannuation funds collectively total over $30 trillion globally and have significant influence over companies as shareholders. However, most funds are underexposed to low-carbon solutions and overexposed to high-carbon assets vulnerable to climate policies. The report aims to educate citizen investors about engaging with their funds to ensure climate risks are properly managed.
This document summarizes the key findings of a survey and interviews conducted to understand private sector investments in natural capital. The survey found growing interest from investors in natural capital due to factors like reducing risk, boosting portfolio resilience, and enhancing reputation. Common motivations for investment included resilience against climate change. However, investments in natural capital still represent a small portion of sustainable finance. The document recommends ways to scale up these investments, such as adopting natural capital accounting, developing larger investment vehicles, facilitating through intermediaries, and incentivizing through government policy.
160416 Should the prevention of long term climate change be put before the de...Sam Norman
The document discusses whether preventing long-term climate change should take priority over the development of LEDCs. It argues that preventing LEDC development in the short-term could help limit global temperature rise to under 2°C by reducing greenhouse gas emissions. However, there are significant ethical issues and challenges with implementing this strategy. International cooperation would be required but has often failed due to voluntary components and inadequate funding in climate agreements. Complete prevention of development would also be difficult and prolong living conditions in LEDCs that include high mortality rates and lower life expectancy.
Paradigm shift a survey of key natural resources cahllengessDr Lendy Spires
1. The speaker discusses the need for a new paradigm in natural resource decision-making that fully considers balancing environmental, social, and economic benefits.
2. He asserts that some regional agreements, certification systems, and public-private partnerships are beginning to test this new collaborative approach.
3. Addressing major challenges like urgency, complexity, and need for innovation will require "Sustainability 3.0" - collaborative leadership across sectors to develop solutions.
Since 2007, The Climate Institute has conducted comprehensive quantitative and qualitative research into Australian attitudes to climate change and its solutions. We have published a number of Climate of the Nation reports and aim to publish annual mid-year reports to track evolving attitudes and actions.
More information can be found on The Climate institute's website:
www.climateinstitute.org.au/climate-of-the-nation-2012.html
Financial institutions play a critical role in our economy. They are the front line in managing all financial risks, including those posed by climate change. The stability of our economy and financial system as a whole will depend on how quickly and deeply financial institutions adapt to the risks faced by the Australian economy from climate change.
Even though many asset owners have made commitments to responsible investment, the majority have yet to ensure that these are effectively implemented. There are inconsistencies in investment practices in different asset classes, high-level statements on sustainability or environmental, social and governance issues are often missing from investment beliefs, and responsible investment commitments are not embedded in investment mandates.
This creates a multiplier effect throughout the investment market. Weak implementation of responsible investment by individual asset owners sends signals to the investment market as a whole that responsible investment is not a priority for asset owners. In turn, this limits the willingness of investment consultants and investment managers to focus on responsible investment and ESG issues in their products and in their advice.
By implementing their commitments to responsible investment with sufficient scale and depth, asset owners can accelerate the development of responsible investment through the investment chain.
Philanthropy for the Climate-Change Challenge with John P. Holdrenpackard343comm
Dr. John P. Holdren, Assistant to the President for Science and Technology, Director of the White House Office of Science and Technology Policy, and Co-Chair of the President's Council of Advisors on Science and Technology (PCAST), presented to the David and Lucile Packard Foundation's Board of Trustees on the state of climate policies and action in the United States and worldwide. The Packard Foundation is deeply invested in climate change mitigation efforts and welcomed the opportunity to discuss with Dr. Holdren where philanthropic funding may have the most impact.
Today, CO2 emissions from fossil fuels are around 50 per cent higher than they were 20 years ago, and have been rising each year. This kind of change to the chemical mixture in the air doesn’t come without consequences. Acting like a blanket, the build-up of greenhouse gases is the main reason why the average global temperature has risen by nearly 1°C in the last century. This booklet explains why a rise of only a few degrees in the average global temperature risks our prosperity, security, and health. It explains why it is so important to reverse the rise in emissions within the decade. And why it is still within our means to do so. For more information visit www.climateinstitute.org.au/dangerous-degrees.html
Climate Action: the need for a systemic approachESD UNU-IAS
Keynote Lecture #2 - 2021 ProSPER.Net Leadership Programme
"Climate Action: the need for a systemic approach", presented by Prof. Lauren Rickards (ECP Director, Urban Futures, RMIT University) at the 2021 ProSPER.Net Leadership Programme, 15 September, 2021.
As the recent National Climate Assessment made clear, extreme weather events—including heat waves, drought, tropical storms, high winds, storm surges, and heavy downpours—are becoming more severe. In many places these risks are projected to increase substantially due to rising sea levels and evolving development patterns, affecting the safety, health, and economy of entire communities. Extreme weather events like Hurricane Sandy have made it clear that we remain vulnerable to such events in spite of advances in disaster preparedness. American communities cannot effectively reduce their risks and vulnerabilities without including future extreme events and other impacts of climate change in their planning both before and after a disaster, and in everyday decision-making.
Why Nations Fail: The Origins of Power, Prosperity, and
Poverty”. The Committee will continue its work on international
This document provides a summary of the November 2012 issue of trade and development, macroeconomic policy questions,
the UN DESA newsletter. It discusses several topics, including: eradication of poverty, operational activities for development,
and sustainable development.
1) An interview with the Foreign Minister of Seychelles about the
unique challenges faced by Small Island Developing States and The Social, Humanitarian and Cultural Committee (Third
hopes for the upcoming 2014 conference on sustainable Committee) opened on 9 October with a keynote address by
development of SIDS.
1) The AIACC project studied climate change adaptation across many developing world regions. A key lesson is to adapt to climate impacts now to avoid greater costs later ("a stitch in time saves nine").
2) Current climate hazards already cause significant damages, demonstrating an "adaptation deficit" that climate change will worsen if left unaddressed. Acting now can yield immediate benefits and enable longer-term adaptation.
3) Other important lessons include: integrating adaptation with development; increasing knowledge about climate risks and responses; strengthening institutions; protecting degraded natural resources; providing financial assistance; involving at-risk communities; and using place-specific adaptation strategies tailored to local conditions.
Climate Change - An Approach to a One-Australia PolicyRichard Hodge
Climate change is the world\'s biggest political problem, and there is no framework to deal with it.
This proposal examines how a \'systems\' approach can develop a framework for action based on inclusive (not divisive) consideration of all issues.
Paul Marquis, the education coordinator for NEXUS Green Building Resource Center, discusses green-building economics, life-cycle costing and total cost of ownership, and rebate and incentive programs available to homeowners.
Environmental sustainability and economic growthSyed Aslam
The document discusses whether environmental sustainability and economic growth can go together. It argues that they are interrelated and countries need to strike a balance between the two. While developing countries focus on growth through industries, this often leaves the environment neglected. However, with collective global efforts like conferences and protocols to reduce emissions, countries are working to resolve this issue. India is presented as an example of a developing country that is seriously addressing environmental sustainability while still experiencing economic growth.
The document outlines solutions for Australia to address climate change, including reducing greenhouse gas emissions 60% by 2050, establishing an emissions trading scheme, and all Australians taking responsibility to use energy more wisely. It argues that decisive action is needed now to lower the risks of climate change, which is already occurring in Australia through rising temperatures, changing rainfall patterns, and more extreme weather events. The solutions proposed aim to both lower emissions and adapt to the impacts of climate change while also creating new business opportunities in clean energy.
The document discusses the role of emergency managers in addressing climate change. It provides definitions for key terms like mitigation, adaptation, and resilience. While emergency managers typically focus on short-term acute hazards, climate change involves chronic impacts that require longer-term planning. The document argues emergency managers should have a seat at the table in discussions around climate change adaptation due to their expertise in risk reduction and building community resilience.
22. TCI Climate of the Nation Flagship Report 2012Richard Plumpton
This document summarizes the findings of a report on Australian attitudes toward climate change in 2012. It was conducted through focus groups and surveys between April and May 2012, a time of highly politicized debate around climate change policies in Australia. The research found that Australians were uncertain about the science of climate change, unconvinced by carbon pricing solutions due to fears over rising costs of living, and had lost confidence in experts and governments on the issue. However, attitudes remained fluid and could still be influenced on both the reality and solutions regarding climate change.
This document summarizes a report about understanding the relationship between climate risk and superannuation (retirement) funds. It discusses how climate change poses risks to investments and the global economy. Superannuation funds collectively total over $30 trillion globally and have significant influence over companies as shareholders. However, most funds are underexposed to low-carbon solutions and overexposed to high-carbon assets vulnerable to climate policies. The report aims to educate citizen investors about engaging with their funds to ensure climate risks are properly managed.
This document summarizes the key findings of a survey and interviews conducted to understand private sector investments in natural capital. The survey found growing interest from investors in natural capital due to factors like reducing risk, boosting portfolio resilience, and enhancing reputation. Common motivations for investment included resilience against climate change. However, investments in natural capital still represent a small portion of sustainable finance. The document recommends ways to scale up these investments, such as adopting natural capital accounting, developing larger investment vehicles, facilitating through intermediaries, and incentivizing through government policy.
Financial Institutions Taking Action on Climate ChangeDr Lendy Spires
This document summarizes various ways that financial institutions are demonstrating leadership on climate change across six areas: 1) low carbon and energy efficiency finance, 2) emissions reducing finance, 3) adaptation finance, 4) measurement and transparency, 5) company engagement, and 6) policy engagement. It provides examples of actions financial institutions are taking in each area and how they are contributing to a low carbon transition. The document argues that further action is needed from both governments and financial institutions to mainstream these leadership actions more broadly.
The document discusses potential issues with divestment campaigns and other investment solutions for college endowments. It outlines that most endowments are externally managed, making divestment challenging. It also notes that divestment may not address underlying portfolio problems and impacts on different asset classes. The document proposes alternative strategies like sustainable investing, shareholder engagement, and diversifying investments to hedge risks from climate change impacts better than divestment alone.
The document is a primer for the 2014 Impact Capitalism Summit. It discusses how impact investing portfolios can outperform traditional investing by incorporating environmental, social and governance factors that are knowable but often ignored. It provides evidence that portfolios focused on high-impact companies can achieve lower risk and higher returns than benchmarks. The primer includes articles making the case for impact investing across different asset classes as part of a responsible investment strategy. It also profiles the summit organizers, Watershed Capital Group, and their experience assisting companies with sustainability solutions.
AQAL Investing: The Future of Venture Capital Investing Dr.BozesanAQAL Capital
The document discusses the need for an integral approach to investing that considers current trends and benefits all parties. It notes that major financial crises and scandals have undermined investor confidence in traditional institutions. As a result, many high net-worth individuals are bypassing institutions and self-organizing to find alternatives that provide both financial returns and positive social impacts. The integral model being proposed aims to unleash the power of current trends for the benefit of all through demystifying the landscape and understanding hidden determinants.
The AODP Global Climate 500 is the world standard for assessing the world’s largest investors on climate-risk management. In a year that has seen carbon and fossil fuel risk become centre stage in the climate debate, the question of who owns and manages the carbon is critical. In addition to measuring and reporting their portfolio exposure, asset owners have come under new pressure to adjust their core investment processes to consistently reduce this exposure and manage third parties whose models and investment decisions drive that exposure. Some of the questions we answer include: how are asset owners rising to the unique challenge of climate change? Are the leaders accelerating? Who are the largest laggards? Which country’s asset owners are most pro-active? Have endowments or foundations improved as a result of the divestment movement? The AODP Global Climate 500 has been produced by assessing the world’s largest 500 asset owners including pension funds, sovereign wealth funds, insurance companies, foundations and endowments. Funds are rated from AAA through to D grade, with an extra X category being added for those funds at the bottom that appear to be doing absolutely nothing to manage this critical risk.
Watershed Capital Group is a specialty consulting firm that assists sustainable companies and fund managers. It helps clients raise capital, execute mergers and acquisitions, and evaluate strategic financial options. Watershed's clients include entrepreneurs, companies, and fund managers scaling sustainable solutions. The firm brings over 100 years of combined experience across multiple industries. Partners have expertise in sectors like renewable energy, agriculture, manufacturing, and environmental services. Watershed also maintains one of the broadest networks in sustainable investing through initiatives it has launched. The firm is committed to helping clients succeed and scaling the sustainable economy.
The document provides an introduction to hedge funds, explaining that they are investment tools used by institutions like pensions and universities to manage risk and diversify investments to help meet financial goals. It describes how hedge funds work, including typical fee structures and regulations around who can invest in them. Various hedge fund strategies are outlined, and data is presented showing that hedge funds have historically achieved higher risk-adjusted returns than other asset classes.
Fulfilling Fiduciary Responsibilities in Selecting Target Date Funds Ron Surz
The document discusses the fiduciary responsibilities of those selecting target date funds, emphasizing the need to choose funds with low fees, broad diversification, and minimal risk at the target date through strategies like its patented Safe Landing Glide Path. It argues that many popular target date funds take on too much risk at retirement by having high equity allocations and focusing only on performance, and it introduces the concept of personalized target date accounts as a safer alternative.
Mutual fund is the better investment planProjects Kart
Mutual funds provide several benefits over other investment options such as banks deposits and stocks. They allow small investors to access a diversified portfolio of securities for a low cost. Mutual funds provide professional management, risk reduction through diversification, liquidity, and convenience. However, investors have little control over costs and cannot create tailored portfolios. The study aims to help new investors understand how to evaluate the risk and return of mutual funds and select appropriate schemes given the current economic environment of falling interest rates and volatile stock markets.
Impact Investing the Performance Realities WhitepaperPhil Zimmerman
Impact investing aims to generate both financial returns and positive social or environmental impact. While impact investing was once thought to require sacrificing returns, advances in impact data and portfolio construction now allow investors to pursue impact goals without compromising risk and return. More investors are demanding impact strategies, driving growth in impact funds and improved reporting from companies. Impact investing now spans asset classes and issues through strategies like ESG integration and positive screening rather than just negative screening.
This document discusses fiduciary duty and climate change risks for institutional investors. It makes the following key points:
1) Institutional investors face physical, liability, and transition risks from climate change that could impact their portfolios. They need to understand and address these opportunities and risks.
2) Fiduciary duty requires putting clients' interests first, but investors currently lack information and tools to properly assess climate change risks. Disclosure and fiduciary duty must be better linked to address long-term sustainability factors.
3) Various principles and frameworks call for considering environmental and social impacts, but clarification is still needed on how fiduciaries can integrate these non-financial factors given legal interpretations of their duties. More work
Green Bonds and AFOLU: Updates and Prospects – Tanja Havemann, ClarmondialCIFOR-ICRAF
This presentation by Clarmondial's Tanja Havemann was given at a session titled "Green Bonds and AFOLU: Updates and Prospects" at the Global Landscapes Forum: The Investment Case on June 10, 2015. For more, please visit http://www.landscapes.org/london/
Hedge funds are investment tools that help institutions like pensions and universities meet their financial goals. They were created in 1949 by Alfred Jones to deliver reliable returns while minimizing risk. Today there are over 9,000 hedge funds globally that invest in different strategies like global macro, event driven, relative value, and equities to generate returns and diversify investments for institutions and high-net-worth individuals. Hedge funds make up over $3 trillion in assets globally.
In the fourth part of our ‘As If People Matter’ series, Michael Townsend takes the investor’s perspective, as they too try and make sense of a changing world.
[Another blast-from-the-past, published four years ago, this piece highlighted the shift towards sustainable investment and ESG metrics that we now see taking real shape.]
This document is a 2014 statement signed by 347 institutional investors representing over $24 trillion in assets. It expresses concern that delays and gaps in climate change policies increase investment risks from physical impacts of climate change and may require more radical policy measures. There is a large gap between the capital needed to finance the transition to a low-carbon economy and current investment levels. The statement outlines actions investors will take to increase low-carbon investments and calls on governments to implement ambitious climate policies to encourage greater capital deployment in climate solutions.
This document is a statement signed by 347 institutional investors representing over $24 trillion in assets expressing concern about the financial risks of climate change and calling for stronger climate policies and investments in low-carbon technologies. It outlines how investors can increase low-carbon investments through identifying opportunities, engaging companies, and calling for policies like carbon pricing, renewable energy support, and fossil fuel subsidy phase outs.
The document outlines a framework for asset owners to develop a climate change strategy in three steps: 1) Measure portfolio exposure to climate risks and opportunities, 2) Act through engaging policymakers and companies, and investing in low-carbon solutions while avoiding high-carbon companies, 3) Review effectiveness by monitoring and reporting. It provides case studies of asset owner actions already underway in engaging and investing, and an appendix on factors specific to different asset classes. The framework is intended to help asset owners align investments with the goals of the Paris Agreement and manage risks from climate change.
Similar to Asset Owners Disclosure Project - 2012 Global Climate Index (20)
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2. AODP Global Climate Index
2012 Results
“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. With around $60 trillion under management the
investment decisions made by these investors will be critical to a safe climate and
our future prosperity.”
Dr John Hewson
Chair of the Asset Owners Disclosure Project
& former leader of the Liberal Party of Australia
This presentation summarises the results from world’s first global climate investment index showing how the world’s
biggest investors, including superannuation funds, are managing climate risk.
Imagery:
All photographs in this presentation were taken by The Climate Institute’s Creative Fellow
Michael Hall. The cover image is of the MV Pasha Bulker, which became stranded on a
beach in Newcastle, Australia, after being caught in a major storm on 8 June 2007.
2
3. Background
The Asset Owners Disclosure Project (AODP) is an independent not-for-profit global organisation
whose objective is to protect superannuation and pension fund members' retirement savings from the
risks posed by climate change. It does this by improving the level of disclosure and industry best
practice.
The AODP has grown from a pilot program with The Climate Institute and has a Board of senior
leaders from investment, business, trade union, political, academic and community backgrounds.
The AODP undertakes the world’s only independent examination of asset owners’ management of
climate risks and opportunities. It provides valuable research and tools to asset owners to support
them in the transition to an investment world in which the impacts of climate change will become ever
more integrated into their core decision-making processes.
What are asset owners?
Here asset owners are understood as pension and superannuation
funds, insurance companies, endowments and foundations, and
sovereign wealth funds. They are typically tasked with managing
investments for the medium to longer term, often up to 20 years for
pension funds.
3
4. “Today there is an opportunity and a risk. Investors who get ahead of that change
will benefit; those who do not will watch as their stranded assets fall in value.”
Bob Litterman
AODP Board Member
& former head of risk at Goldman Sachs
4
5. Introduction
Climate change represents a unique challenge to asset owners and their ability to manage global,
cross-sectoral, systemic risks. It demands change management across every function of a fund.
Many asset owners have already acknowledged the need to build capacity and challenge traditional
industry practices in order to manage climate change. However there has so far been little to inform
the market on what constitutes best practice let alone to enable consumers to differentiate between
funds.
It is against this background that AODP operates its Global Climate
Index, so that stakeholders of all kinds, including the beneficiaries
themselves, can see which funds are leading and which are lagging
– providing data that is critical to the efficient operation of the
market.
5
6. The Investment Chain
Asset owners are
the highest
institutional point
of the investment
chain.
The capital flow starts with people like pension members or insurance customers who provide the top
level capital to the asset owners. The asset owners then allocate the money to their fund managers to
invest on their behalf.
While asset owners are commonly responsible for investing over the long-term (often upwards of 20
years), they typically incentivise their fund managers over a much shorter time horizon of about three
years, producing a huge disconnect between the (long-term) interests of their beneficiaries and the
(short-term) rewards paid to the fund managers.
6
7. The Survey
In July 2012, the AODP sent information requests to the world’s 1,000 largest asset owners including
over 800 pension and superannuation funds, 80 insurance companies, 50 sovereign wealth funds and
50 foundations/endowments. These organisations collectively have over US$60 trillion of funds
under management, ranging from around US$500 million to US$1.4 trillion each.
Assessments of over 300 funds from publicly available information combined with responses
submitted by the asset owners, result in the world’s first league table of funds according to their
climate change capability.
Data is sourced from public information as well as disclosures that funds provide through the survey.
This data is analysed and ratings are applied to all funds.
7
8. The Survey
The survey comprises approximately 45 multiple choice questions covering the five main areas of an
asset owners’ operations and investments, as outlined below:
• Transparency / The degree to which funds disclose and share information with the AODP and the
general public.
• Low-carbon investment / The extent of any low-carbon investments held by the fund.
• Active ownership / How actively funds engage with investee companies, including the use or
support of shareholder resolutions, engagement strategies, proxy voting, etc.
• Risk management / Whether funds are measuring, monitoring or managing climate change risks.
• Investment chain alignment / The adoption by funds of structural mechanisms to help manage
climate change risks including mandate structure, incentive alignment, etc.
8
9. “Most people would agree we need to move from destructive short termism to longer
term sustainable management of retirement and other funds. For the first time fund
members can now get some insight into what their fund is actually doing to manage
the climate risks posed to their retirement savings.”
Julian Poulter
Executive Director of AODP
9
10. Leaders vs. Laggards
Disclosure and transparency
• Leaders are becoming more open about how they plan to respond to the challenges and opportunities
presented by climate change.
• Laggards are not disclosing their climate change capability to the AODP and do not make this information
publicly available.
Measuring and monitoring climate risk
• The leaders are making a start – for example, monitoring their portfolio’s carbon exposure relative to a
benchmark over time and taking stock of the fossil fuel reserves on the balance sheets of the companies
they invest in.
• Laggards do not recognise the need to measure risk at a portfolio level and/or continue to procrastinate.
Issue low carbon mandates as a hedge
• Leaders are more likely to have investments in the low carbon economy.
• Laggards remain heavily exposed to carbon-intensive investments.
10
11. Leaders vs. Laggards
Active ownership
• Leaders have a higher instance of having a proxy voting policy, making it public and also making voting
records public.
• Laggards often do not have a proxy voting policy and the worst will simply defer to vote in line with
management.
Have a policy
• Leaders often have sound and integrated policies regarding climate change risk.
• Laggards often do not have a policy that makes their stance on climate change or other ESG issues
clear.
Aligning the investment chain
• Leaders appear to be making more progress in aligning the interests of their beneficiaries with the
remuneration of third party service providers like asset consultants and fund managers.
• Laggards continue to have a disconnect between the long-term horizon of their beneficiaries and the
typically short-term horizon of their fund managers the markets they invest in.
11
12. Key Findings
Laggards
• A large proportion of funds appear to be doing nothing at all to specifically address climate change.
Australia
• Disclosure disciplines appear more embedded in Australia than elsewhere.
Japan
• Banks in Japan are notoriously opaque and the surveyed pension funds failed to produce any
meaningful disclosure despite having the second largest pension system in the world.
SWFs and endowments
• Sovereign wealth funds have struggled to make significant disclosures around climate change.
• Not a single endowment/foundation responded to the request for information.
12
13. Key Findings
A long way to go
• While the leaders are performing well, there is still a long way to go before their climate change
strategies are fully developed.
• Only South Africa’s Government Employees Pension Fund has calculated its exposure to the fossil
fuel reserves.
• No fund has a way to assess the overall climate risk at the portfolio level.
Size doesn’t matter
• The ability of funds to respond to and to build capacity around climate change is not affected by
size.
• None of the very largest funds of over a trillion dollars appear in the top 20.
Crisis of transparency
• The AODP received 17 direct responses out of 1,000 funds. Of these only half provided full
responses to the survey.
• Of the 314 asset owners ranked in total, 91 funds had no public information available on their
climate change capability.
13
14. Key Findings
Below is a snapshot of the top 10 asset owners in the AODP Global Climate Index. To view the full table visit
www.aodproject.net.
/ FUND NAME / COUNTRY / TYPE / RATING / GICCC / CDP / PRI / RANK
Local Government Super Australia Pension AAA * * * 1
Government Employees Pension Fund South Africa Pension AAA * 2
CareSuper Australia Pension AA * 3
Stichting Pensioenfonds Zorg en
Netherlands Pension 4
Welzijn (PFZW) AA * *
Cbus Super Australia Pension AA * * * 5
British Columbia Investment
Canada Pension 6
Management Corporation AA * * *
APG Groep Netherlands Pension AA * * * 7
VicSuper Australia Pension AA * * * 8
UniSuper Australia Pension AA * * * 9
AustralianSuper Australia Pension AA * * * 10
14
15. Regional Spotlight
Americas
• More than US$60 trillion is under management by the largest asset owners, nearly a third of
whom are in the US. Yet no US funds ranked in the top 10.
• New York State Common Retirement Fund was the leading US fund at 14th place with Canada’s
British Columbia Investment Management Corporation being the highest North American fund at
6th place.
• US asset owners are particularly strong in the area of proxy voting and have tended to be much
more active with raising shareholder resolutions, including those related to environmental, social
and governance issues.
15
16. Regional Spotlight
Americas
Below is a snapshot of the top 10 asset owners in the AODP Americas Climate Index:
/ FUND NAME / COUNTRY / TYPE / RATING / GICCC / CDP / PRI / RANK
British Columbia Investment Canada Pension * * 6
Management Corporation AA
RBC Royal Bank Canada Pension AA 11
New York State Common Retirement USA Pension * 14
Fund A
CalPERS USA Pension A * * * 15
CalSTRS USA Pension A * * * 20
Hartford Financial Services Group Corp USA Pension A * 21
TIAA-CREF USA Pension BBB * 29
Service Employees International Union USA Pension BB * * 42
MetLife (insurance) USA Insurance B 51
Canada Pension Plan Canada Pension CCC * * 56
16
17. Regional Spotlight
Asia-Pacific
• The Asia-Pacific region represents 19 per cent of the world’s 1,000 largest asset owners. Australia
has the most with 68, followed by Japan with 44 then Hong Kong with 33.
• Within the Asia-Pacific region, Japanese asset owners had a clear lead in terms of value of assets
under management.
• Both Asia-Pacific and European funds rated the best in terms of disclosure. However, in the Asia-
Pacific, this was driven by Australian funds, who became well-versed in disclosing during the
Australian trial period of the AODP in the last three years.
• The Asia-Pacific region has a high participation rate in each of the three main collaborative
investment initiatives focused on climate change and responsibility – 30 per cent of asset owners
are a member of at least one of these initiatives. Some 14 per cent are a member of one of the
global investor groups on climate change and 18 per cent are signatories to the PRI.
17
18. Regional Spotlight
Asia-Pacific
Below is a snapshot of the top 10 asset owners in the AODP Asia-Pacific Climate Index:
/ FUND NAME / COUNTRY / TYPE / RATING / GICCC / CDP / PRI / RANK
Local Government Super Australia Pension AAA * * * 1
CareSuper Australia Pension AA * * 3
Cbus Super Australia Pension AA * * * 5
VicSuper Australia Pension AA * * * 8
UniSuper Australia Pension AA * * * 9
AustralianSuper Australia Pension AA * * * 10
NGS Super Australia Pension AA * * * =12
Vision Super Australia Pension A * * 18
BT Super for Life Australia Pension A * 19
State Super Australia Pension BBB * * * 23
18
19. Regional Spotlight
Europe
• Europe has the second highest proportion of the largest asset owners. It also dominated the
largest of the asset owners overall in terms of value of assets under management.
• European funds tended to rate well in all five categories of inquiry. They were especially strong in
terms of active ownership (for instance proxy voting policies, engagement strategies and
participation in collaborative initiatives) and investment chain alignment (such as remuneration
structure of fund managers and developing internal resources).
• Europe had the highest participation rate in each of the three main collaborative investment
initiatives focused on climate change and responsibility – 37 per cent of asset owners are a
member of at least one of these initiatives.
19
20. Regional Spotlight
Europe
Below is a snapshot of the top 10 asset owners in the AODP Europe Climate Index:
/ FUND NAME / COUNTRY / TYPE / RATING / GICCC / CDP / PRI / RANK
Stichting Pensioenfonds Zorg en
Welzijn (PFZW) Netherlands Pension AA * * 4
APG Groep Netherlands Pension AA * * 7
Kommunal Landspensjonskasse
(insurance) Norway Insurance AA =12
Amundi France Pension A * * 16
Church of England Pensions Board United Kingdom Pension A * * 17
Allianz SE Germany Insurance A * * 22
Munich Re Group Germany Insurance BBB * 24
ATP Denmark Pension BBB * * * 25
UBS AG Switzerland Pension BBB * * 28
Första AP-Fonden Sweden Pension BBB * * 30
20
21. Regional Spotlight
Middle East & Africa
• Only 37 of the world’s 1,000 largest asset owners are based in the Middle East and Africa. The
UAE has the most with 9, followed by South Africa with 8 then Israel with 4.
• The Middle East and Africa region performed the worst although there were two good performers
in GEPF (Africa’s largest pension fund) and Sanlam (financial services group, with a focus on
insurance).
• GEPF is ranked second globally. Their strong performance is a reflection of their commitment to
sustainability issues despite the relative confines of having their portfolio invested solely in South
Arica.
• The Middle East and Africa region had the lowest aggregate participation rate in collaborative
investment initiatives that focus on climate change and responsible investing (e.g. GICCC, CDP
and PRI). However, 19 per cent of asset owners are signatories to the CDP. While this is relatively
low, this is higher than the US with 14 per cent.
21
22. Regional Spotlight
Middle East & Africa
Below is a snapshot of the top 12 asset owners in the AODP Middle-East & Africa Climate Index:
/ FUND NAME / COUNTRY / TYPE / RATING / GICCC / CDP / PRI / RANK
Government Employees Pension Fund South Africa Pension AAA * * 2
Sanlam Group South Africa Insurance C * * =87
Dubai World UAE SWF D =162
Menora Mivtachim Senior Pension Fund Israel Pension D =181
Abu Dhabi Investment Authority UAE SWF D =224
Investment Corporation of Dubai UAE SWF D =224
Kuwait Investment Authority Kuwait SWF D =224
Libyan Investment Authority Libya SWF D =224
Public Institution for Social Security Kuwait Pension D =224
Qatar Investment Authority Qatar SWF D =224
Revenue Regulation Fund Algeria SWF D =224
SAMA Foreign Holdings Saudi Arabia SWF D =224
22
23. “Working people should expect more from the people who they have trusted with their
retirement savings to manage the long term. These funds need to wake up to the
scale of climate risk but also members need to start applying pressure to drive the
change.”
Sharan Burrow
AODP board member
& General Secretary,
International Trade Union Confederation
23
24. Conclusion
“The report found a crisis of transparency following the assessments of more than 300
funds from publicly available information with 91 funds having absolutely no public
information available.”
Julian Poulter, Executive Director of the AODP
• We have a crisis of transparency in this industry that must be fixed. Our team of analysts
has compiled large amounts of data from the survey responses and from our own internal
assessments using publicly available information, but too often this data is unverified and variable
in quality and detail. Governments, regulators and particularly members of pension funds must
take responsibility for driving this transparency if we are to ever get some of the world’s largest
investors to reveal their strategies for climate change
• We are not convinced that a single asset owner has accurately assessed or managed its
climate risk over its entire portfolio of investments. Even those leaders who are attempting a
thematic allocation are often doing so from instinct and searching for low-carbon opportunities
with similar return characteristics to their high carbon counterparts.
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25. Conclusion
If we accept that there is a reasonable chance we will see a transition to a low-carbon economy, how
bad will the value destruction of investments be? We need to ensure investments are prepared now
in order to better survive a carbon crash or carbon repricing event in the future.
The transition to the low-carbon economy will not happen without significant market disruption and
volatility and all portfolios will suffer although to varying degrees depending upon whether they have
been hedged against such an outcome.
Researching and driving the degree to which investors hedge their portfolios in order to reduce those
impacts is a core business task of AODP.
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26. Videos
Dr John Hewson
Chair of the Asset Owners Disclosure Project &
former leader of the Liberal Party of Australia / John Connor
CEO of The Climate Institute
Watch them on The Climate Institute’s YouTube page
www.youtube.com/theclimateinstitute
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27. More information
Visit…
www.climateinstitute.org.au www.aodproject.net
Or connect with The Climate Institute on Facebook or Or connect with the Asset Owners Disclosure Project
Twitter… or on Facebook or Twitter…
www.facebook.com/theclimateinstitute http://www.facebook.com/AODProject
www.twitter.com/climateinstitut https://twitter.com/AODProject
John Connor @jconnoroz Julian Poulter @JulianPoulter
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