July 15, 2009
Investor Awareness of Impact of Climate Change is Growing
by Robert Kropp
The Institutional Investors Group on Climate Change finds that signatories to its Investor
Statement on Climate Change report increased attention to climate change in their investments.
The Institutional Investors Group on Climate Change (IIGCC), a forum
for understanding the investment implications of climate change whose 52 members represent $5.6
trillion in assets, has released its second annual report on the actions that the signatories to
Investor Statement on Climate Change have taken.
The report, entitled Inv
estor Statement of Climate Change Report 2008, found that awareness of climate change as a
financial issue among signatories to the Statement is growing, and that more than three-quarters of
them include references to climate change in their policies and belief statements. According to the
report, "The main areas of focus for investors continue to be those where climate policy makes the
issue material, for example where there are clear investment opportunities in renewable energy or
sectors that are exposed to emissions trading schemes."
The report also found that 50% of
asset owners are now questioning asset managers about their integration of climate change into
investment research and decision-making, as well as shareowner activities. While the inclusion of
climate change in Requests for Proposal (RFPs) and Investment Management Agreements (IMAs) are
still rare, some asset owners will consider such an approach in the future.
percent of asset owners report that they monitor the performance of asset managers on climate
change, and 60% report that their expectations are often met. But while the number of asset owners
requesting advice on clean energy investments has grown, only a minority instructs their
consultants to include climate change in their advice.
Regarding shareowner engagement
with companies, the report found that policy commitments on climate change received less attention
in 2008, as in the wake of the global economic crisis issues relating to corporate governance
received greater attention.
According to the report, its "findings reinforce the view that
strong public policy is critical for investors and companies to move capital towards a low carbon
economy." Respondents report active engagement on such policy issues as greenhouse gas (GHG)
emissions, emissions trading schemes, and renewable energy incentives.
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