Ontario Teachers’ Pension Plan (OTPP), an investor known for its advanced risk-management tools and processes, considers that the common tools available to investors to mitigate carbon risk for investors – portfolio carbon footprints and thematic divestment – provide incomplete risk management. The fund has suggested macro- and microanalysis is necessary to understand a company’s complete
Mercer’s extensive climate change report, launched today, gives investors a practical framework for monitoring and managing climate risk, shifting the discussion from philosophical agreement to practical investment implementation. In Investing in a time of climate change Mercer outlines extensive dynamic investment modelling that analyses changes in the return expectations of assets between 2015
While divestment is a useful tool to communicate concerns of climate risk to stakeholders, it is not an optimal investment strategy, in part because it ignores short-term benchmark risk. A research paper by MSCI provides a framework for evaluating ways to reduce two dimensions of carbon exposure – current carbon emissions and potential future emissions
A number of large institutional investors, including AP1, the Environment Agency and AustralianSuper, made changes to their strategic asset allocation as a result of Mercer’s 2011 study on climate risks, and now the consultant is working with a new raft of investors to assess forward-looking climate change scenarios against their current allocations. Meanwhile one of
If Robert Litterman were a CIO of a public pension plan he would not try to hit an “unrealistic return target”. Amanda White speaks to him about risk, quants, asset allocation and climate change. There is a serious problem with US public pension funds and the “unrealistic commitments and unrealistic return targets” they have set,
Trustees need practical guidance on how to implement a comprehensive investment approach to climate change. Helga Birgden, head of responsible investment for Asia Pacific at Mercer and Nathan Fabian chief executive of the Investor Group on Climate Change Australia/New Zealand, show them how. In the 2013 Global Investor Survey on Climate Change, more than 80
Top1000funds.com is the market leading news and analysis site for the world’s largest institutional investors. It focuses on leading the global investment industry to continuous improvement through case studies of best practice in governance and decision making, portfolio construction and efficient portfolio management, fees and costs, and sustainable investing.
The publication pushes the industry to question whether status quo processes and behaviours to tackle risks and opportunities will be sufficient in the future, and actively campaigns for diversity, sustainability, transparency, innovation and better alignment of fees in the investment industry.
Top1000funds.com is read by investment professionals in more than 40 countries.
Uncategorised posts