UK - Pension fund apathy on environmental issues twinned with short-term analysis of the problem has suppressed the inclusion of climate change in investment decision making, new research showed.
A FairPensions study showed around 89% of fund managers consider climate change as an "important" or "very important" investment issue. However, they are prevented from taking action by short-term analysis and a lack of demand from clients, including many pension schemes.
The survey of 39 fund managers showed 83% believed the low current carbon price was a barrier to including climate change into investment decisions.
Some fund managers stated there was an "imbalance between the relatively short term horizons of mainstream investment analysis and the relatively long term nature of the material business impacts of climate change".
Some 56% cited lack of demand from investors as a hindrance to managing climate change.
The survey also showed a split between managers who believed "all sectors of the economy will be affected" contrasting those who think "carbon emissions are material and relevant for some sectors".
However, it said reporting on climate change risks and opportunities is disappointing, with 59% not reporting at all on this or only to clients on request.
FairPensions said this was reason for pension funds to request such information and ensure their interests were being promoted, while the government should consider planned emissions reporting guidelines applicable to fund managers' portfolio emissions.
FairPensions director of campaigns Duncan Exley said: "Climate change and the regulatory efforts to reduce are now certain to have serious impacts on companies and their investors."
He warned fund managers' clients and their advisers need to be assertive about their interests and be aware that all fund managers are not the same.
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