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

US funds rally against corporate mergers

The two largest state public pension funds in the US – the California Public Employees’ Retirement Sysrtem (CalPERS) and the California State Teachers Retirement System (CalSTRS) – have filed a joint motion with the US District Court, Southern District of New York, to be designated lead plaintiff in class actions against Bank of America stemming

Hermes FM to implement ‘responsible’ management

Hermes Funds Management, 100 per cent owned by the UK’s largest pension scheme BT pension fund, will implement “responsible asset management” across its entire product range. mrec4inarticleinline Sponsored Content scnative1 scnative2 scnative3

Desperate times for US corporate plans

Investments of more than $100 billion are required to rebalance the equity allocations of the largest US corporate defined benefit plans, as they join their international peers, registering record losses for 2008 and pushing them deep into underfunded territory. mrec4inarticleinline Sponsored Content scnative1 scnative2 scnative3

US funds favour global equities allocations

The home country bias of US public pension plans is diminishing, with the average allocation to US equities, falling from 42.3 per cent to 38.1 per cent from 2003 to 2008. mrec4inarticleinline Sponsored Content scnative1 scnative2 scnative3

Barclays looks to cash in its iShares chips

Barclays has confirmed it has held discussions with a number of potential buyers over the sale of its profitable exchange-traded funds business, iShares, but says no decision regarding the sale of any assets has been made. mrec4inarticleinline Sponsored Content scnative1 scnative2 scnative3

Wilshire to drop Dow Jones for index provision

Wilshire will drop Dow Jones as the calculating engine of its indices, and will independently managed its more than 200 indices, including the high-profile Dow Jones Wilshire 5000 index, from April 1. mrec4inarticleinline Sponsored Content scnative1 scnative2 scnative3

Previous