December 11, 2012 - 12:00pm
The Climate Institute is the agent of the Asset Owners Disclosure Project in Australia. This release was put out jointly.
The Asset Owners Disclosure Project (AODP) today released the first ever global climate investment index showing how the world’s biggest investors, including superannuation funds, are managing climate risk.
“This first survey of the world’s 1,000 largest retirement funds, insurance companies and sovereign wealth funds’ management of climate risks paints a disturbing overall picture of greenwash and reckless mismanagement but with some signs of progress,” said AODP Chair Dr John Hewson.
“With around $60 trillion under management the investment decisions made by these investors will be critical to a safe climate and our future prosperity. The survey found many funds didn’t even have a climate policy and many that did hadn’t changed investment decisions as a result.”
“With six of the top 10 funds, Local Government Super topping the list and being one of only two AAA rated funds in the world, Australian
funds rank relatively well.”
The index was built following information requests to the world’s 1,000 largest asset owners including over 800 pension funds, 80 insurance companies, 50 sovereign wealth funds and 50 foundations/endowments.
The survey focused on five main categories – transparency, risk management, investment chain alignment, active ownership and low carbon investment. It includes asset owners from 63 countries, in all regions of the world.
“The report found a crisis of transparency following the assessments of more than 300 funds from publicly available information with 91 funds having absolutely no public information available,” said AODP Executive Director Julian Poulter.
Other key findings include:
- Only South Africa’s Government Employees Pension Fund (GEPF) has calculated its exposure to fossil fuel reserves via the balance sheets of its investee companies. For this and other reasons GEPF is ranked second and is the only other AAA rated fund.
- The ability of funds to respond to and to build capacity around climate change is not affected by size - in Australia, Local Government Super with $6.5bn under management is a real leader, while the Future Fund with $80bn didn’t even respond due to “inadequate resources”.
- Leaders have a higher instance of walking the talk – putting their money where their mouth is and investing in low-carbon investment opportunities – as well as more frequently and publicly exercising their voting rights as shareholders and having a better grasp on how to monitor thei exposure to climate change related impacts.
“Most people would agree we need to move from destructive short termism to longer term sustainable management of retirement and other funds,” said Poulter. “For the first time fund members can now get some insight into what their fund is actually doing to manage the climate risks posed to their retirement savings.”
John Connor, CEO of The Climate Institute and member of the AODP Board said: “It’s pleasing to see Australian funds performing better, perhaps because this is where The Climate Institute has piloted surveys from 2008, but all funds have a long way to go manage the risks and realise the opportunities of the climate challenge.”
In its first year of operating as an individual organisation, AODP has built a high profile Board and launched the world’s first social media platform -
- that allows ordinary citizen investors to directly request disclosure from their superannuation and pension funds.
AODP will release more detail from the survey in the coming months and will survey global funds again next year. Details from the Australian pilot surveys can be found
The full index is available through the AODP website
For further information
Julian Poulter | Executive Director, AODP | 02 8239 6299
Kristina Stefanova | Communications Director, The Climate Institute | 02 8239 6299
The Asset Owners Disclosure Project is an independent not-for-profit organisation dedicated to increasing transparency over how the world’s largest institutional asset owners manage climate change risks, including pension funds, superannuation funds, insurance companies, foundations and sovereign wealth funds. See www.AODProject.net.