Green investing was named one of Earth Advantage’s top 10 green building trends of 2010. Unfortunately, a new study by Ceres shows that nearly half of the investment managers who responded to a survey don’t even consider climate change to be an important factor in the decision-making process.
The Ceres study, which was conducted for the Investor Network on Climate Risk, surveyed the managers of the funds listed in the Pension & Investments Global 500 Survey. Of the 84 respondents, 44 percent said that they don’t consider climate change at all when making decisions about fund investments. According to the report, these fund managers “do not believe that climate change is financially ‘material’ to investment decision-making.” Source: Ceres
Although 44 percent don’t consider climate risks, 49 percent reported that their clients don’t ask them to look at climate change. If the clients aren’t asking for it, there is no outside motivation for these investment managers to dig into the climate risks associated with the funds that they manage.
This is a problem. Investors need to push for an environmental focus by their fund managers and then these managers will have no choice but to consider climate change. Although it would be nice if all of these investment managers took the bull by the horns, so-to-speak, and initiated this on their own, it just isn’t realistic. The push needs to come from the people paying the bills — in this case, the clients.
The good news is that many of these investment managers are in the early stages of examining climate risk during the portfolio management process. This means that just a little push from the clients may be enough to get the ball rolling and allow climate change to play a more prominent role in the decision-making process.
For more information, download the report now: Investors Analyze Climate Risks and Opportunities: A Survey of Asset Managers’ Practices (PDF).