Study: Nearly 90 per cent of pension savings not accounting for climate risks
Assessment of world’s 100 largest pension funds finds only 13 per cent have been assessed for their exposure to climate-related risks
Up to £7.5tr of savings managed by the world’s largest pension funds are potentially exposed to climate-related risks and have yet to undergo any formal climate risk assessment, a new analysis released today reveals.
Non-profit initiative the Asset Owners Disclosure Project (AODP) assessed the world’s 100 largest pension funds for the study and found just 13 per cent of savings collectively managed by the funds have to date been assessed for their exposure to climate-related risks.
AODP, which is managed by campaign group ShareAction, said that meant 87 per cent of the world’s biggest pension funds, accounting for £7.5tr of savings, remain unprepared for the economic shocks that could result from global warming, potentially exposing millions of savers worldwide to long-term losses.
The study found only 10 per cent of these pension funds have made a formal commitment to align their portfolios with the goals of the Paris Agreement, including Sweden’s AP7 and Finland’s Varma. Meanwhile, a “staggering” 65 per cent of funds have no policy that specifically references climate change.
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