Jun 14, 2011 - 2:25pm
The Asset Owners Disclosure Project and its Australian partner The Climate Institute say a report released today by the world’s three major investor groups has misrepresented the true state of inaction among super funds in Australia, and the rest of the world, regarding mitigation of climate-related risks in their portfolios.
Executive Director of the Asset Owners Disclosure Project, Julian Poulter, says “This report demonstrates that self-disclosure by super funds does not provide members and stakeholders with material information about investments levels and risk analysis.”
“The report shows that asset owners and asset managers currently have an abysmal 0.3 per cent of total funds invested in low carbon technology and clean energy.”
“Asset consultant Mercer, which advises many major funds, has recommended an allocation of 40% of all portfolios to climate sensitive assets. Today’s report indicates funds have not even begun to make serious inroads towards this target.”
“While investor groups claim the situation is being “monitored”, this is not translating into responsible climate risk action. In April, 86% of Woodside Petroleum shareholders (excluding Shell) voted against Australia’s first and only resolution to disclose carbon price assumptions.”
“The report completely ignores the need to rank funds using benchmarks such as those used by the AODP which includes: portfolio emissions intensity, fossil fuel risk, voting disclosure, climate hedging strategy and disclosure to members,” says Mr Poulter.
In the next six months, the AODP will be re-issuing its annual global survey to measure the real level of material risk and action, with funds to be ranked and rated.
“Members of pension funds deserve to know where their fund sits in the marketplace in terms of managing climate risk. This sort of window-dressing by super funds gives them very few clues as to where to place their retirement savings,” said Mr Poulter.
“To move capital to the low carbon economy requires funds to disclose their full risk position. This is a missed opportunity for funds and their investor groups to prove they are really acting to manage climate risk and maximise investment opportunities.”
For further information:
Julian Poulter | Executive Director, Asset Owners Disclosure Project & Business Director, The Climate Institute | 02 8239 6299
The Asset Owners Disclosure Project is an independent not-for-profit organisation that requests climate risk data from the world’s 1000 largest Asset Owners including Pension Funds, Insurance Companies and Sovereign Wealth Funds. It is a fully audited, independent framework of benchmarking and rankings. The Climate Institute has run the Australian AODP for the past three years.