Carbon is the new commodity and could have a place in the strategic allocation of a super fund's portfolio.
Carbon has arisen as an asset class on the back of concern about climate change and carbon emissions, according to Mercer leader of responsible investment Helga Birgden.
"In the future carbon has a role in the strategic asset allocation part of an investor's portfolio," Birgden said.
Other investment opportunities include carbon emission trading permits and funds dedicated to clean technology.
As well as being an asset class, investors should look at carbon as a risk management tool, according to Birgden.
"Investors may also want to protect themselves against climate change. A strategic allocation to carbon through carbon futures could be seen as a long-term hedge against climate change," she said.
She said superannuation funds will also need to push their fund managers for information about how well the companies in their portfolios have addressed the issue of carbon emissions.
Mercer has developed a tool to analyse the carbon footprint of investor portfolios, following its alliance with environmental research firm Trucost.
Similar alliances could be in the pipeline, according to Birgden.
"Our responsible investment team is eight times bigger than any of our competitors. We also ensure that analysts in our investment consulting team are aware of environment, governance and sustainability issues. We believe that measuring a carbon footprint of a portfolio is now a mainstream activity," she said.
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