CalPERS and several other institutional investors signed the Montreal Carbon Pledge yesterday. The pledge mandates that the investors measure and publicly report the carbon footprint of their entire investment portfolio.
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These investors, which include CalPERS and Canada’s Bâtirente, will measure and publicly disclose their portfolios’ carbon footprints each year. The United Nations Principles for Responsible Investing will oversee the pledge.
Carbon footprinting enables investors to quantify the carbon content of a portfolio. And this quantification extends to the stock market: 78% of the largest 500 public companies now report carbon emissions.
“The main reason to carbon footprint and decarbonize portfolios is not an ethical or moral one for asset owners — it is a financial risk imperative,” says Julian Poulter, executive director of the Asset Owners Disclosure Project.
As for investors, “There is a perfect storm of reported carbon data, reliable portfolio carbon measurement tools and low carbon investment solutions,” says Toby Heaps, CEO of Corporate Knights, a Toronto-based company focused on environmentally responsible capitalism. “This makes it possible for investors to […] reduce their carbon exposure like never before.”
Priya Mathur, Vice President of the CalPERS Board, said this about the signing:
“Climate change represents risks and opportunities for a long-term investor like CalPERS,” said Priya Mathur, CalPERS Board of Administration Vice President. “This pledge signifies our continued commitment to better understand our own footprint and help forge solutions to serious climate change issues. We call on other investors to join us in assessing the climate risk in their investment portfolios and using that knowledge and insight in their investment decision.”
Other investors that signed the pledge yesterday include the Environment Agency Pension Fund, Etablissement du Régime Additionnel de la Fonction Publique, PGGM Investments and the Joseph Rowntree Charitable Trust.
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