Pension scheme members to be approached for info for 1000 fund climate investment response ranking

Pressure group to survey and rank 1000 global institutional investors starting in May.

Pension scheme members will be approached to provide information on their fund’s response to global warming under plans by the Asset Owners Disclosure Project (AODP), a not-for-profit, pressure organisation that aims to rank institutional investors on their response to the invesment risks of climate change. The AODP, which kicked off in Australia, will survey about 1000 global pension, superannuation, insurance and sovereign wealth funds starting on May 12. It will approach funds with 32 multiple choice questions based on investors’ transparency on disclosing carbon data, levels of low carbon investment, engagement with companies on environmental issues, risk management and incentivising asset managers and suppliers to reduce CO2 emissions. The initiative says the subsequent investor ranking system aims to cover over $60 trillion worth of capital.
Julian Poulter, Executive Director of the AODP, said the collection of information would be based on three prongs: information from funds themselves, public disclosure records and seeking fund information from scheme members directly where information is not provided. Poulter said the approach to scheme members was part of a revised strategy by the AODP to build collaborations with influential organisations and pension scheme members: “We’re looking looking to build a critical mass of pressure on institutional investors to do something.” The AODP announced two appointments to its board this week, which indicate the direction it is taking. They were former AustralianFederal Opposition leader, John Hewson and International Trades Union Congresss (ITUC) General Secretary, Sharan Burrow. Hewson said: “Stakeholders of all types need to see which asset owners are leading and by how much and who the laggards are so we can create pressure to drive change and thus move towards a more effective hedging of fund portfolios and a more robust financial system to deal with climate change”. In January 2011, The European Institutional Investors Group on Climate Change (IIGCC), the North American Investor Network on Climate Risk (INCR) and the Australia/New Zealand Investor Group on Climate Change (IGCC) surveyed more than 250 asset owners and asset managers on climate risks, producing a report on their responses and releasing the headline figures.
Poulter says the investor groups have “not gone far enough” in the AODP’s view. He said: “Investor groups can come together and take the climate issue to governments. But we think that pension scheme members want more detailed information looking at fossil fuel risks, carbon hedging, etc.”
The AODP’s climate rating results will be released at the end of September with overall rating results publicly available. It said in-depth analysis of the data would be available for asset owners to purchase as a subscription. This, it said, would include more detailed scoring and peer, geography and asset class ranking.