U.S. Funds Lag In Managing Climate Risk: AODP


The Asset Owners Disclosure Project makes the business case for companies to invest in low-carbon footprint technologies and for investors to invest in businesses that are making a real effort to avoid carbon emissions.

The 2015 AODP index highlights that many of the “world’s largest and best known investors continue to make a big gamble on accelerating climate change by investing in heavily carbon-exposed assets, while only a small minority are blazing a trail to a safer, low-carbon world.”

Moreover, the third annual AODP index of the top 500 global asset owners reports that almost half of the funds surveyed (232) did “nothing to protect investments under their stewardship from the threat of climate change” last year.

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The AODP index points to nine asset owners as the top performers. Rated AAA, they are (in order of overall ranking): Local Government Super (Australia); KLP (Norway); CalPERS (US), ABP (The Netherlands); Environment Agency Pension Fund (UK) New York State Common Retirement Fund (US); Australian Super; PZW (The Netherlands) and AP4 (Sweden).

Statement from AODP Chair John Hewson on climate risk

AODP Chair John Hewson commented on the 2015 index: “Asset Owners hoping that policymakers bail them out of their climate risks need a reality check. These funds have a duty to mitigate portfolio risk against continuing political intransigence. The leading funds know this and they are increasingly underweight carbon to the extent that if every fund copied their approach, we would be well on the way to solving climate change”.

Climate Risk

“It is now up to every pension fund member or insurance company shareholder to drive their funds into copying that model and taking the world into a safer climate,” he continued.

Key points in 2015 AODP Index

U.S. Funds Lag In Managing Climate Risk: AODP

Some key points in the 2015 AODP index include:

  •  Only 7% of asset owners can actually calculate their emissions
  •  Only 1.4% of asset owners have decreased their carbon intensity from the previous year
  •  Only 2% of asset owners have developed an emissions intensity reduction target for next year
  •  No fund (including those who have partially divested) has yet calculated their portfolio-wide fossil fuel reserves exposure
  • The U.S. lags behind Europe and other global regions in top ranked performers and has the most “D” and “X” ranked funds.