LONDON (Reuters) – Most of the world’s largest public pension funds are providing little or no information about how climate change will affect the value of their assets, a report by the Asset Owners Disclosure Project (AODP) shows.
The AODP, part of investor pressure group ShareAction, tracked funds with combined assets of more than $11 trillion and found that 63 percent of them were at risk of breaching their duty to savers.
Less than 1 percent of the funds’ assets were invested in low-carbon solutions and only 10 percent of the funds had a policy to exclude coal from their portfolios, the AODP said in its report published on Monday.
The report is the first to assess the funds against the recommendations put forward by the Task Force on Climate Related Disclosures, set up by the Group of 20 Nations’ Financial Stability Board in 2015.
Launching a global ranking to show how funds were performing against the task force’s framework, the AODP said that a number of European schemes scored highly, including Fourth Swedish National Pension Fund (AP4), which manages assets worth about $40 billion.
Niklas Ekvall, chief executive of AP4, said that climate change was the “single biggest systematic threat to asset values in the long term” and that AP4 had moved to ensure its portfolio and engagement supported the move to a low-carbon economy.
“As large investors, pension funds own substantial parts of the global economy and have a stake in maintaining its long-term health and stability,” he said.
Reporting by Simon Jessop; Editing by David Goodman