Fund “heads in sand” on climate risk

An Australian superannuation fund with A$6.6 billion ($6.9 billion) under management has achieved number-one ranking in a global survey of how the world’s top 1000 retirement funds, insurance companies and sovereign wealth funds are responding to climate risk.

Sydney-based Local Government Super (LGS) has received the top ranking in the inaugural Climate Index of the Asset Owners Disclosure Project (AODP).

The index was built following information requests to the world’s top 1000 asset owners from 63 countries, with around $60 trillion in funds under management. The survey focused on five main categories: transparency, risk management, investment chain alignment, active ownership and low carbon investment.

“We’ve been working steadily to build a sustainable portfolio for over 10 years,” said Peter Lambert, chief executive of LGS.

“The holistic approach, in which LGS seeks to invest in line with environmental, social and government principles across all asset classes, not just a few that might be considered easier, is what sets us apart.”

Around $3.46 billion, or just over half, of the LGS portfolio is held in responsible investment strategies across Australian and international equities, property, absolute return, private equity and sovereign bonds.

Sponsored Content

Australian funds made up six of the top 10 funds. South Africa’s AAA-rated Government Employees Pension Fund, which has calculated its exposure to fossil fuel reserves through the balance sheets of investee companies, was ranked second.

Also in the top 10 were Dutch funds PFZW and APG Group, along with Canada’s British Columbia Investment Corporation.

Overall, the creators of the index sounded a warning, with AODP chair John Hewson saying that despite signs of progress, the index “paints a disturbing picture of greenwash and reckless mismanagement”.

Julian Poulter, executive director of AODP, said the index showed that many funds had their “heads in the sand” on climate change and there was a “crisis of transparency” with 91 funds having “absolutely no public information available” on their climate strategies.

Leave a Comment

Sort content by

Tennessee finally enters private equity game

The $28 billion Tennessee Consolidated Retirement System is a late entrant into private equity with its debut $25 million allocation to the Draper Fisher Jurvetson Fund X, occurring at the same time the fund has cut its allocation to short term assets by 5 per cent. mrec4inarticleinline Sponsored Content scnative1 scnative2 scnative3

UN fund increases equities exposure

The $37 billion United Nations Joint Staff Pension Fund increased its allocation to equities by 4 per cent in the past quarter, at the expense of real estate and bonds, and is now overweight the asset class, as it continues to support active management. mrec4inarticleinline Sponsored Content scnative1 scnative2 scnative3

CalPERS measures liqudity levels

  About half of the $201 billion in assets managed by CalPERS is available to liquidate within 90 days according to a new total fund liquidity assessment to be presented to the investment committee as part of the quarterly risk management update, which also shows the fund to have a total leverage of 19 per

Mapping the risks of bigger government

Bigger appetites for absolute return strategies, new attitudes to risk and governance, and the onset of major regulation – these were the forces for change identified in Watson Wyatt’s 2008 study, Defining Moments. But the social fallout from the financial crisis has sparked another phenomenon that could heavily impact institutional investors, according to Tim Hodgson

LACERS alters allocations to hedge against inflation

The $9.3 billion Los Angeles City Employees Retirement System will tilt its asset allocation to hedge against inflation and will discuss altering its investment policy to explicitly address inflation at each annual asset allocation review. mrec4inarticleinline Sponsored Content scnative1 scnative2 scnative3

Massachusetts special commission recommends system changes

A recently completed report by a special commission into the appropriateness of the Massachusetts retirement system contemplated the defined benefit versus defined contribution benefit design, concluding that the existing defined benefit structure was optimal, in part because it put the portfolio management in the hands of professionals. The report entitled, The Special Commission to Study

Previous