A climate change strategy now plays a major role in institutional investment decisions across the world, according to research by the Carbon Disclosure Project.
More than eight out of 10 investors surveyed by the CDP said that consideration of the potential impact of climate change is now central to decisions on their asset portfolio.
Some institutions even revealed a willingness to go beyond just asking companies to disclose carbon footprint data by directly asking them to cut their emissions.
CDP’s Paul Simpson said this reflects a long-term trend: “Following clear indications, from the new US administration and other governments, we can expect to see a marked increase in global climate change regulation.
“This will increase the materiality of climate change for investors and drive up costs for companies unable to manage their greenhouse gas inventories.
“Our research shows that investors are already including climate change related issues into their investment decisions.”
Marc Fox, vice president of GS Sustain at Goldman Sachs, added that how a company responds to climate change is now a critical factor in their overall prospects.
He said: “Climate change strategy, energy efficiency and carbon emissions are increasingly important aspects of a company’s competitive advantage.”
The latest study forms part of CDP’s annual data release for 2009, made available to 3,700 listed companies.
The study includes responses from 80 investors, among them asset managers, pension funds, insurers and socially responsible investment funds including Allianz, AXA Group, BlackRock, Goldman Sachs, Hermes Investment Management and Swiss Re.
CDP represents 475 institutional investors with combined assets under management of over $55 trillion worldwide. More than 1,550 major corporations around the globe report their greenhouse gas emissions and the risks and opportunities posed by climate change via the CDP.
• Originally published in GreenerLiving magazine in April 2009