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

Peter Bernstein: Risk Inverse

Peter Bernstein, an economic consultant and respected investment thinker passed away on Friday June 5 in New York. Widely regarded as an intellectual giant in the investment circles for his ability to translate complex mathematical models into practical applications, he founded the Journal of Portfolio Management in 1974 and wrote a number of respected books

…as consultant assessment initiates changes to internal equity team and technology

CalPERS has reached its capacity to internally manage equities portfolios and would need to make changes to technology and staff resources if the internally-managed equities program is expanded, according to the outcome of the annual consultant review of CalPERS’ internal equity team by Wilshire Associates. mrec4inarticleinline Sponsored Content scnative1 scnative2 scnative3

Asset class review inspires opportunistic allocation at CalPERS’

CalPERS is considering adopting an “opportunistic” program seeking to profit from substantially undervalued assets across various asset classes and strategies, and will be limited to 3 per cent of the fund’s total market value. mrec4inarticleinline Sponsored Content scnative1 scnative2 scnative3

The future of risk management: How independent should risk management be?

Barry Schachter, research associate with the EDHEC Risk and Asset Management Research Centre and director, quantitative resources, Moore Capital Management believes the current crisis is a catalyst for change in the conduct of risk management because it has challenged the efficacy of the existing risk management model, but simply imposing regulation is not the change

SWFs struck at financial crisis epicentre: $50b in losses from financials

For their biggest public market investments in the last two years, sovereign wealth funds (SWFs) zeroed-in on the most dogged companies in the worst-performing sector: Western financials. These decisions incurred paper losses of $US56.3 billion, accounting for most of their public market losses for the period. mrec4inarticleinline Sponsored Content scnative1 scnative2 scnative3

Working hard for the money

Last year large institutional investors in the US, including the State of Massachusetts Pension Fund and CalPERS, dedicated money to senior bank loans. Amanda White examines the outlook for the sector and talks to group head of ING’s senior loan group, Jeff Bakalar, about whether institutional allocations to the sector have been tactical or strategic.

Previous