Climate change could slash as much as 10 per cent off portfolios in the next 20 years, according to Mercer’s much-anticipated climate change report, the result of an 18-month collaboration with 14 institutional investors from around the globe.

The international climate process survived at COP16, but the  UN Cancun Agreement does not solve key issues such as legally binding emission targets and carbon pricing, according to chair of the Institutional Investors Group on Climate Change, Ole Beier Sorensen.

Two-thirds of Europe’s alternative assets fund managers oppose the AIFM Directive, with the EU passport and disclosure requirements topping the list of concerns.

Bonds are the favoured asset class at 53 per cent among European sustainable and responsible investors with equities dropping to 33 per cent, according to a Eurosif SRI report.

Foundation and endowment funds are allocating the largest percentage of alternatives to their portfolios, with public funds coming second ahead corporate plans in third place.

Norway’s Finance Ministry is under fire for huge fees paid to external fund managers of the NOK3 trillion ($478 billion) Government Pension Fund, with the country’s auditor general criticising Norges Bank as “reprehensible” for paying out NOK500 million ($81 million) on a mandate of NOK3.3 billion ($534 million).

Like investors the world over, Americans thought property was gilt-edged, then along came CDOs. Meanwhile, corporate debt just keeps on keeping on. John O’Brien, van Eyk’s head of research, spoke with Philippa Yelland.

After the damage of the global financial crisis, funds should be submitting themselves for voluntary financial health checks to diagnose vulnerabilities and pinpoint risks, asset consulting firm Mercer says. 

In a sign that ESG issues are becoming a greater concern in China, the country’s first ESG index will launch this Friday as a joint venture between the main Shanghai exchange and an Italian research company.

Defined-contribution pension plans “are in their adolescence” and one workable model for their maturity is public-private entities which use social networking to promote the confidence of their members, a world authority on pension funds says.

Dr Raj Thamotheram, one of the brains behind the UN Principles for Responsible Investment, is critical of the slow integration of ESG (environment, social and governance) issues into many fund managers’ processes.

UK home-biased equity portfolios have lost almost 3 per cent due to the BP oil crisis, in contrast to diversified global equity portfolios which have lost only 0.33 per cent, according to a MSCI research paper. Since the BP oil crisis began on April 20, the company’s share price has halved, and the impact on domestic-biased institutional portfolios shows the merits of allocating assets globally, according to MSCI’s research bulletin ‘The BP Oil crisis spills over to UK domestic portfolios’, June 2010. BP stock represented about 6 per cent of [...]