(January 7, 2010) – According to a survey released on Wednesday by an institutional investor group, nearly half, or 44%, of the world’s largest money managers are not factoring in climate-related trends.
Electricity generators, automobile manufacturers, and insurance companies face the greatest industry risk from climate change, the report finds. The result is significant ‘hidden risks’ for investment managers’ multitrillion-dollar portfolios, according to the survey.
In a related report, pension funds and other investors holding more than $1 trillion of assets urged the U.S. Securities and Exchange Commission to require companies to disclose climate-related risks, such as regulatory, litigation, physical, and competitive risks in their quarterly and annual filings.
“Despite the growing recognition of the far-reaching impacts climate change will have on the global economy, only a handful of asset managers are integrating climate risks and opportunities throughout their investment practices,” said Mindy S. Lubber, president of Ceres and director of the Investor Network on Climate Risk, in the report. She added that the survey findings and the recent subprime mortgage meltdown reflect that investment managers are overly focused on short-term performance, ignoring longer-term business trends.
Ceres, a Boston-based coalition of environmentalists and investors, conducted the study in early 2009, with responses from 84 asset managers managing $8.6 trillion in assets. The survey was completed at the request of the Investor Network on Climate Risk, a network of more than 80 pension funds and other institutional investors who depend on asset managers to manage their investment portfolios, according to the report.
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