Asset managers engage with less than 20 per cent of their portfolio on climate change according to research from Redington.
Research found that on average asset managers engage with around 20 per cent of their portfolio on climate change, 15 per cent on net-zero and 11 per cent on Scope 3 emissions while 63 per cent stated that they have made net-zero or similar climate commitment.
Redington global head of sustainable investment Anastasia Guha says: “It’s widely recognised that climate-related risks not only affect our planet, but the economy too – a sentiment seemingly echoed by asset managers through the various public net-zero commitments made over the past year or so.
“Yet in order to really make progress, our industry must continue to close the gap between the words we use and what we deliver in practice. These actual levels of engagement imply that some of our words could be akin to greenwashing, which doesn’t help anyone.”
Research also found that there were low engagement on supply chain human rights, pollution, and biodiversity- at 9 per cent and 8 per cent respectively. Only 80 per cent of surveyed strategies incorporate the measurement and assessment of climate-related risks into their investment processes. 48 per cent of the 80 per cent used climate change screens; 74 per cent used climate risk assessment tools, and 72 per cent employed one or more emissions-based metrics.
Redington questions the extent to which integration is translated into concrete investment decisions as the survey revealed that only 64 per cent of asset managers could provide an example of where an investment decision had been affected by a climate view in the last six months.
Guha says: “As an adviser to over £600bn of client assets, allocated across 150+ asset managers, we recognise that we have a responsibility to use our influence as a force for good, to create positive change within the savings and investment industry. This is why earlier this year we published our 7-point climate action plan, which includes aligning our default client advice with achieving the goals of the Paris Agreement, reaching net-zero by 2050 at the latest.
“Assessing asset managers’ and specific investment teams’ climate and ESG capabilities is a key input into our asset manager research process as we believe it’s fundamental to having a robust strategy that’s aligned with our clients’ climate objectives. Only by working together as an industry will we be able to tackle the monumental task that climate change poses and help drive the global transition to net zero.”
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