Almost half of the world’s top 500 investors have ignored climate risk completely, according to the 2016 edition of the Global Climate 500 Index, an annual report produced by the Asset Owners Disclosure Project. “Climate change risk is now a mainstream issue for institutional investors and last year has seen many significantly step up their action to manage this. However, only a handful are protecting their portfolios from the very real danger of stranded assets, and it is shocking that nearly half the world’s biggest investors are doing nothing at all to mitigate climate risk,” AODP CEO Julian Poulter said in a release.
The index rates the world’s biggest investors, a group consisting of pension funds, insurers, sovereign wealth funds, foundations, and endowments, “on their success at managing climate risk within their portfolios, based on direct disclosures and publicly available information.” Investors taking climate action are rated from AAA to D. Those investors taking no action are given an X rating.
Actions included in the index include measuring carbon in investment portfolios, striving to reduce carbon in portfolios and measuring stranded assets.
According to the report, the number of X-rated investors in the index grew from 232 in 2014 to 246 in 2015. At the other end of the spectrum, investors rated A to AAA increased by 29 percent, from 24 in 2014 to 31 in 2015.The B to BBB group changed minimally, with 25 investors falling into this range in 2015, down from 26 in 2014. The C to CCC group grew 52 percent in the last year from 27 to 41 while the D group shrunk from 191 to 157.