A practical guide to managing climate change risk for sovereign investors and central banks.
The fiduciary duty of official institutions, such as central banks, sovereign wealth funds and state pension funds, means the risks posed by climate change need to be carefully weighed, and then addressed with capital allocation and engagement.
But by divesting from fossil fuels – reducing exposure to a significant income paying sector of global markets – are institutions failing their fiduciary duty? To what extent should institutions engage with the companies they invest in and potentially vote in favour of shareholder resolutions?
This short guide unpicks some of the misconceptions around climate change risk and provides practical advice for institutions to stay on the right side of their fiduciary duty.
- Why should sovereign investors and central banks be concerned about climate change?
- Implications for investments
- What risks and opportunities are there from climate change?
- Practical actions to reduce exposure to climate change risk
- An action plan for sovereign investors and central banks
How we can help
We help central banks design and implement investment strategies to get the most out of their reserves in a risk-controlled manner.
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We help our clients understand and implement responsible investment principles.