Leading Institutional Investors Survey Asset Managers on their Analysis of Climate Risks

Today seven leading institutional investors who are members of the Investor Network on Climate Risk (INCR) called on the top 500 global asset managers to respond to a survey on how they are evaluating climate risks and opportunities.

“Given the sweeping nature of climate change, climate risks are embedded in every investment portfolio,” the investors noted in their cover letter. “As fiduciaries entrusted with trillions of dollars of fund assets, we remain firmly convinced that climate change presents both material risks and significant opportunities for investment portfolios.”

The California Public Employees’ Retirement System (CalPERS), California State Teachers’ Retirement System (Cal STRS), Connecticut Retirement Plans and Trust Funds, Florida’s Chief Financial Officer, Illinois State Board of Investment, New York City Comptroller, and Pennsylvania Treasury Department are the seven investors who sent the survey.

The survey is designed to help investors understand what investment managers are currently doing to incorporate climate risk and opportunity into their financial analysis and company and portfolio valuation.  Ceres, a coalition of investors, environmental groups and other public interest organizations, and manager of the Investor Network on Climate Risk, will analyze the survey results to develop a set of “best practices” with respect to financial analysis and company and portfolio valuation.  The results will be aggregated, so that survey respondents will not be ranked or scored in relation to one another.

“This is a wonderful chance for us to learn how businesses are planning to deal with climate change.  As institutional investors, we are concerned how environmental risks and opportunities will ultimately affect our returns,” said California Controller John Chiang, who asked for the survey.  Chiang is a Board member of both CalPERS and CalSTRS – both funds pushed the investment manager survey at his request.

CalPERS and CalSTRS have been leaders in the Investor Network for Climate Risk with environmental initiatives in all asset classes and particularly focused on corporate governance.

Anne Stausboll CalPERS Interim Chief Investment Officer noted, “This survey will give us information about investment managers’ capacity to analyze and assess climate risks.  Our hope is that it will lead managers to ask more questions about climate risks and incorporate this analysis into both their investment decisions and their portfolio valuation.”

“Climate change, like subprime mortgages, poses far-reaching hidden financial risks that investors cannot ignore,” said Mindy S. Lubber, president of Ceres and director of 70-member Investor Network on Climate Risk. “We hope this survey will raise investment managers’ awareness about the importance of considering climate-related risks when evaluating companies’ portfolios and making investment decisions.”

About Ceres and INCR

Ceres is a leading coalition of investors, environmental groups and other public interest organizations working with companies to address sustainability challenges such as global climate change. Ceres coordinates the INCR, a $7 trillion network of institutional investors and financial institutions that promotes better understanding of the financial risks and investment opportunities posed by climate change. For more information, visit www.ceres.org and www.incr.com.