Fewer than one-in-five pension funds in North America have committed to achieving net zero carbon emissions across their portfolios by 2050 according to a study that underlines the need to accelerate the fight against climate change in the world’s largest pensions market.

Read also Australian pension fund settles landmark climate lawsuit

Just 17 per cent of North American pensions funds aim to reach net zero by the middle of the century while a further 8 per cent expect to reach that target at a later date, according to the Aviva Investors analysis.

Read also US. 10 Ways to Close Public Pension Funding Gaps

Four out of every 10 pension funds in both Asia and Europe have already committed to reaching net zero carbon emissions by 2050, more than twice as high as in the US where the Trump administration has played down the risks of global warming. However, devastating wildfires in California, which have burnt more than 2m acres of land, have led to calls from pressure groups for pension funds in the golden state to divest entirely from fossil fuels.

The investment arm of UK insurer Aviva polled 535 pension funds and 532 insurance companies from 34 countries with combined assets of more than €2tn to assess how sentiment among institutional investors was shifting during the coronavirus pandemic.

The EU has created a green taxonomy to encourage more sustainable investing in contrast to the US where the Department of Labor is insisting that private pension administrators must prove that they will not sacrifice financial returns by incorporating environmental, social and governance (ESG) considerations into their asset allocation decisions.

The DoL’s narrow interpretation of an administrator’s fiduciary duty which focuses purely on financial returns has restricted US pension plans’ room for manoeuvre.

Read more @FT