More than a third of asset managers worldwide were unable to provide an example of climate change-related engagement efforts when interviewed by consultancy firm Redington recently.
Redington's study of 104 managers – representing over $10trn (£7.8trn) in combined assets – also found that less than two-thirds have an environmental, social, and governance (ESG) engagement policy in place.
And despite 76% of respondents saying they consider climate-related risks and opportunities, just 60% could provide an example of when these factors have actually influenced buying or selling decisions.
The findings come as business and government leaders meet for the start of Climate Week 2020 in New York, which is expected to be the biggest climate summit taking place this year.
Nick Samuels, head of manager research at Redington, warned that engagement with climate change is still not translating into concrete and consistent portfolio decisions.
He continued: “We would expect all our managers, regardless of asset class, to have at least one, if not several, examples of climate change-related engagements with their portfolio companies.
“Managers who thoroughly analyse – and take action on – risks are crucial to driving progress, so, moving forward, we strongly hope to see this number increasing.”
Redington’s research also found that just 28% of asset managers are currently reporting against the Task Force on Climate-related Disclosures (TCFD) guidelines.
However, the firm does expect to see significant improvement in the coming months, with 50% of managers surveyed currently considering adoption of the TCFD guidelines in their reporting procedures.
“As an industry, we must look to continually grow and deepen our expertise on these matters,” Samuels continued.
“The pivotal role financial institutions have to play in shaping the world of tomorrow cannot be underestimated, and we must embrace the responsibility that comes with it.”
Author: Chris Seekings
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