Mark Carney Effect: Number Of Investors Ignoring Climate Risks Rose Last Year

  • Date: 02/05/16
  • Jessica Shankleman, Bloomberg

The number big investors ignoring climate change risk increased last year despite a stark warning from Bank of England Governor Mark Carney’s about the potential for “huge” losses from a sudden shift in regulation designed to curb global warming and fossil fuels.

Almost half of the world’s top 500 investors are failing to act on climate change — an increase of 6 percent from 236 in 2014, according to a report Monday by the Asset Owners Disclosure Project, which surveys global companies on their climate change risk and management.

The Abu Dhabi Investment Authority, Japan Post Insurance Co Ltd., Kuwait Investment Authority and China’s SAFE Investment Company, are the four biggest funds that scored zero in the survey. The 246 “laggards” identified as not acting hold $14 trillion in assets, the report said.

“It is shocking that nearly half the world’s biggest investors are doing nothing at all to mitigate climate risk,” said Julian Poulter, chief executive officer of the research group. Pension funds and insurers that ignore climate change “are gambling with the savings and financial security of hundreds of millions of people around the world and risking another financial crisis,” he said.

He attributed the rise to a change in methodology — Asset Owners Disclosure Project stopped giving credit to companies who were transparent about their decision not to act on climate and to companies that only pledged to take action without delivering change.

New Method

“Some people were getting off the magic points number just by being transparent, but they weren’t doing anything at all,” he said in a telephone interview.

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