As wildfires rage and elections loom, protecting portfolios from climate risk, carbon taxing, and
climate change is on investors’ minds. On Sept. 10 at 2 p.m., CIO will feature a live conversation with CalPERS Interim Managing Investment Director, Board Governance & Sustainability, Anne Simpson and ISS ESG Head of Investor Consulting Climate Viola Lutz on “Climate Risk and Financial Performance,” part of CIO’s new Allocator Insights series. The two will discuss ways to assess climate’s truest risks and how climate change translates to a near-term portfolio context, as well as the primary factors to get right.
CalPERS is in the midst of measuring climate risk for all its holdings, and recently finished assessing its public investments. Simpson will speak on key takeaways from the process that have been both protective and additive to her portfolio’s holdings. Lutz will share how new data is being transformed into metrics and measurements by investors, and ways it is being applied to investments. She has also been involved in developing sustainability-linked bond principles for companies for the years ahead. She will discuss new tools that can help investors to foresee their own risk scenarios, and stress test their portfolios by applying their own climate scenario assumptions to companies’ financial statements to assess financial impact.
During this discussion, we’ll be asking such questions as: When measuring for scope, if only a percentage of companies are reporting correctly, how do you assess a sensible outcome? With all of climate change’s uncertainties, shouldn’t a CIO be agnostic and focus on opportunities within the current market? What are solid ways of measuring risks to each portfolio holding, as well as to the portfolio in aggregate? How can allocators provide guidance on climate risk if they do not manage money directly? As one gets started, what are the top three things to consider?
Simpson reports to the CalPERS CEO and is responsible for strategic initiatives across the $400 billion fund. These include Climate Action 100+, a global investor alliance of over $35 trillion driving business action on climate change. She also serves on the US Securities and Exchange Commission (SEC)’s Investor Advisory Committee, the Robert F Kennedy Leadership Council, and Senior Advisory Board of the Center for Responsible Business, at Haas Business School, UC Berkeley. Among her publications is “The Financial Ecosystem: The Role of Finance in Advancing Sustainability” (Palgrave MacMillan) with Satyajit Bose and Dong Guo, at Columbia University. Simpson was recognized by TIME Magazine as one of 15 women globally leading the fight on climate change
Lutz is head of investor consulting climate at ISS* ESG working on topics at the intersection of finance and climate change. She works with investors on assessing the climate impact of investments and contributing to developing proxy voting solutions that integrate climate considerations. She is also responsible for Second Party Opinions for green and social bonds. Lutz is co-author of several studies including, most recently, a study on climate risks for the Austrian financial market. She holds an master’s from Sciences Po Paris and a bachelor’s in economics from the University of St. Gallen, Switzerland.
Register here for tomorrow’s engaging discussion: http://events.strategic-i.com/CIOWSAllocatorInsights.
*ISS is the parent company of ai-cio.com.