22 September 2021
In this week’s episode, we discuss our recent climate investment risk report, along with co-author Laasya Shekaran. We cover how we analysed our database of UK asset owners for climate risks, and what some of the key and surprising conclusions were as well as the tangible next steps that investors can take.
Read the report:
The tip of the iceberg: How UK institutional investors are responding to climate risks
- How we classified asset classes at a high level for climate risk based on carbon intensity and data availability.
- How we segmented the asset owner universe into 4 segments based on their asset allocations (because using averages can mask trends underneath): Growth, Diversified, Low-risk and matching.
- The majority of UK asset owners now have more in bonds than equity, so this should be the first port of call for looking at climate risk.
- A lack of data and transparency in private markets and multi-asset funds is a priority need to address for clients in the “diversified” segment.
- Pooled funds now exist in both equity and corporate bonds that aim to tilt toward Paris-aligned portfolios over time, investing in companies.
- We respond to some of the common criticisms of ESG investing, and discuss how corporate bond investors can have s much power as equity holders.
The most underappreciated thing in investing
The influence and power of investing – money talks and no matter whether you are a big or small investors you can align your investments in a way that has a real impact.
One thing to take away
Addressing climate risk isn’t just for large investors, small investors can do it too.
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