The Asset Owners Disclosure Project
(AODP) is an independent global not-for-profit organisation whose objective is to protect members' retirement savings from the risks posed by climate change. It does this by helping funds to redress the huge imbalance in their investments between high-carbon assets (50-60 per cent of a portfolio) and low-carbon assets (typically less than 2 per cent) and realigning the investment chain to adopt long-term investment practices.
Key elements of the initiative are:
- Conducting an annual survey and assessment of the world’s 1,000 largest asset owners pertaining to their management of climate change risks and opportunities.
- Publishing rankings of the world’s largest asset owners to allow members, stakeholders and industry to see which funds are better than others at managing climate risk.
- Providing and promoting climate change best practice to drive and improve climate change management and capability of asset owners.
- Developing consumer-facing programs to educate asset owner’s members or stakeholders of the financial risks associated with climate change.
- Researching trends in climate risk, member behaviour and institutional investment.
- Creating frameworks to encourage active ownership.
The AODP released the first ever global climate investment index
in December 2012. The report found a crisis of transparency, with very few funds providing information to the public about their investments.
Yet the world's largest 1,000 largest funds manage an excess of US$60 trillion, with less than 2 per cent invested in low-carbon assets.
The AODP believes that asset owners have a responsibility - and in many cases a fiduciary duty - to manage the long-term risks associated with climate change. It is therefore important for their stakeholders, members and the public to be able to differentiate between those asset owners who are implementing best practice and those who are not. It is this differentiation that will help create competition and improve best practice. A key part of the AODP is measuring how quickly and effectively asset owners are managing the challenge.
The AODP was originally developed in 2008 as an initiative of The Climate Institute and while it is now a separate entity, the two maintain a close working relationship.