New initiative to explore how investors can align their portfolios to the goals of the Paris Climate Change Agreement.
UN Climate Change News, 3 May 2019 – The Institutional Investors Group on Climate Change (IIGCC) is launching a new initiative to explore how investors can align their portfolios to the goals of the Paris Climate Change Agreement.
Many pension funds and asset owners recognise climate change as one of the largest systemic risks in their investment portfolios.
An increasing number have made commitments to low carbon investment, and there is significant interest in determining how investors can support the objectives of the Paris Agreement.
This project is an IIGCC initiative with a steering committee of leading European investors that includes AP2, Brunel Pension Partnership, Church of England Pensions Board, LGPS Central, PKA, and TPT Retirement Solutions.
This initiative aims to help develop a common understanding of the concepts relating to alignment with the Paris Agreement, and explore options for approaches and methods that can be used by investors who wish to align their portfolios to the Paris Agreement.
The initiative will initially:
- Develop working definitions for key concepts, and identify different approaches and methods relevant to the objectives of aligning portfolios to the Paris Agreement.
- Explore the feasibility of these different approaches and methods for different asset classes and sectors.
- Test the most promising approaches and methodologies for alignment using real world portfolios.
- Explore feasibility and opportunities for aggregation of alignment approaches at the portfolio level.
- Identify the financial characteristics of the portfolios and transition options in the context of wider financial risks.
The initiative is delivered as part of IIGCC’s ‘Investor Practices’ programme which helps asset owners and managers better assess and manage both climate risk and opportunity, and to report on their actions more effectively.