Just 5% of European pension schemes have considered the investment risks and opportunities posed by climate change, according to a new report by Mercer.

This is a slight increase on the 4% of funds that were doing so last year, and comes after NASA stated that April 2017 was the second hottest since records began in 1880.
"Inactivity by pension schemes brings risks from stranded assets and physical climate risks, as well as reputational concerns," Mercer global director of strategic research, Phil Edwards, said.
"Investors must consider the potential financial impacts of climate change on their portfolios. A proactive approach can open up investment opportunities in the green fields of the low carbon economy."
The research is based on the findings of a survey of 1,241 institutional investors across 13 countries, with total assets of approximately 1.1trn (£970bn).
It was found that they are increasingly factoring in environmental, social and corporate governance (ESG) issues into their investment process, with financial materiality cited as the main reason for this trend.
This comes after previous Mercer research revealed that long-term investors could position their portfolios in ways that consider the impacts of climate change without materially reducing expected returns.
The next most popular reason cited for considering ESG issues was reputational risk, with 22% of asset owners now having a standalone responsible investment (RI) policy.
It was also found that 28% consider ESG and stewardship as part of the manager selection and monitoring process - up from 22% last year - while 29% request that their advisor do this on their behalf, up from 20% in 2016.
In addition, the findings show that there has been an increase in expectations for disclosure, with 9% of asset owners reporting on their stewardship activities publicly - up from 6% last year.
"The increase in asset owners citing financial materiality as the driver behind considering ESG risks is a positive development for the market - asset owners simply cannot afford to dismiss ESG risks as non-financial," Mercer RI specialist, Kate Brett, said.
"Regulators are increasingly clear that asset owners should be considering all risks that may be financially material, including ESG related risks and longer-term risks such as climate change.
"Proactive consideration of these issues is absolutely consistent with fiduciary duty."