To date, there have been zero state-level pension funds that have heeded public calls to divest from fossil fuel-dependent companies.
But that doesn’t mean some pension funds aren’t interested in learning the impact climate change could have on their investments in the future.
Several of the world’s largest pension funds, including CalSTRS, have joined with Mercer to conduct a study forecasting the impact of climate change on markets over the next 40 years. From Chief Investment Officer:
The study aims to map out potential climate scenarios and their impacts on economies and markets, with forecasts stretching out to 2030 and 2050.
It follows a weekend of marches across the world calling for action on climate change, as the United Nations prepares to meet for a Climate Summit in New York on September 23.
Among the pension funds signed up to the study are the California State Teachers’ Retirement System (CalSTRS), New Zealand Super, and Sweden’s AP1. In total, Mercer said asset owners representing $1.5 trillion were backing the survey.
Jane Ambachtsheer, head of Mercer’s global responsible investment team, said the survey’s objective was “to help investors make robust, well–researched investment decisions that factor in a consideration of climate change”.
“New data points and scientific evidence are now available, including the topical subject of the potential risk posed by so-called ‘stranded’ carbon assets,” she added. “Ultimately, it’s about enabling institutional investors to adapt over the longer-term.”
Brian Rice, portfolio manager at CalSTRS, was among those welcoming the launch of the study. “The multi-scenario, forward looking approach to this study makes it unique,” he said. “Investors will be able to consider allocation optimisation, based on the scenario they believe most probable, to help mitigate risk and improve investment returns.”
A few days ago, CalSTRS announced plans to triple its investments in clean energy.
Photo: Paul Falardeau via Flickr CC License