Suppliers of asset owners will be rated on their success in managing the risk of climate change in a set of global indices, the Asset Owners Disclosure Project (AODP) announced today.
The independent not-for-profit organisation already examines the world's largest asset owners.
Now it will turn to their suppliers by rating asset managers, investment consultants, proxy advisers and rating agencies on how they are incorporating climate risk management and low-carbon investment into the service they provide.
AODP CEO Julian Poulter said: "Asset managers are starting to wake up to the huge opportunities to make superior returns in the low-carbon transition.
"There is growing competition and our ranking will help identify who is really on top of those opportunities for their asset owner clients."
The new set of annual indices will be modeled on the AODP's Global Climate 500 Index, which rates the world's largest asset owners on their climate risk management strategies - 500 pension funds, insurance companies, sovereign wealth funds, foundations and endowments worth more than $70tr (£49.5tr).
Called the Global Climate Asset Manager Index, it will rate the top 50 asset managers covering 70% of the market and more than $40tr (£28.3tr) in investments. Assessments will be based on direct disclosure and/or publicly funded available information.
Additionally, it will analyse how institutions are: managing climate risk; investing in the low-carbon economy; and engaging with investee companies on these issues.
"We have now identified the leading asset owners who are building the low-carbon economy and shorting carbon in their portfolios. These leaders need support to overcome resistance within supplier communities and the perverse incentives that exist," said Poulter.
He said the new index would help asset owners drive change down the investment chain and hold their suppliers and advisers to account, adding: "Our new indices will extend the same climate rating criteria to the whole investment chain, showing the leaders and laggards in black and white. There can now be no escape from scrutiny further down the chain."
The announcement was made after the establishment of the Taskforce on Climate-Related Financial Disclosures by the Financial Stability Board.
The taskforce will develop voluntary guidelines for climate-related financial risk disclosures for use by companies in providing information to lenders, insurers, investors and other stakeholders in the financial system. It is chaired by former New York City mayor Michael Bloomberg.
The new indices will be released in autumn.
