Survey Finds Climate Change a Growing Concern for Investors

(June 14, 2011) — A survey released June 13 of pension funds, foundations, and investment managements firms revealed that the majority of respondents saw global climate change as both a potentially significant investment risk and as an opportunity.

The Global Investor Survey on Climate Change: Annual Report on Actions and Progress 2010 was conducted by Mercer Investment Consulting.

Overall, the survey found that 98% of pension funds and foundations and 87% of asset managers believe that global climate change poses risks but also offers opportunities. It also found that 57% of pension funds and foundations and 80% of asset managers make specific reference to climate change risk in their investment policy.

The results were belied somewhat, however, by the composition of the respondents. Those surveyed were members of the North American Investor Network on Climate Risk, the European Institutional Investors Group on Climate Change and the Australia/New Zealand Investor Group on Climate Change. Altogether, the respondents manage a combined total of more than $12 trillion.

The survey results accompany an increased push within parts of the industry to make environmental, social, and governance (ESG) concerns more central to investors’ thinking. Large asset owners like California Public Employees’ Retirement System (CalPERS) and California State Teachers’ Retirement System (CalSTRS) have led the effort. Recently, those public pension plans were among several that signed a letter to the companies of the Russell 1000 index urging the companies to implement ESG concerns into their business models.