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Laxman Pai, Opalesque Asia: Sovereign wealth funds are doing more to address climate change in their portfolios, as more among them are employing tools like carbon footprinting and climate scenario analysis to monitor their climate impact.
According to a survey by the International Forum of Sovereign Wealth Funds (IFSWF) and the One Planet Sovereign Wealth Fund Network (OPSWF), over a third of respondents have carbon footprinted their portfolio, up from 18.5% last year.
"They also appear to be becoming more discerning about which tools are appropriate for their specific portfolio," it said.
The report draws on a survey and interviews with 40% of the world's sovereign wealth funds. It provides the only comprehensive account of how these investors understand how climate change will affect their long-term returns and what they are doing to mitigate their impact on the planet.
Sovereign wealth funds are also becoming increasingly sophisticated in understanding climate financing. "Whereas previously, we have seen them concentrate their climate efforts on unlisted assets, such as private equity and real estate, this year, we noted an uptick in efforts in listed markets, including fixed income and hedge funds," the report said.
After consistently being ranked as the least attractive climate change strategy, catastrophe insurance is becoming more popular with sovereign wealth funds, with 55% of respondents rating this asset class as either a four or five out ...................... To view our full article Click here
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