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Asset owners slow to act on climate change

Impax Asset Management is a London-based manager that targets themes such as resource scarcity and clean energy via listed and private equity strategies.

Mr Jenkyn-Jones is in Australia talking to institutional investors about the climate change risk inherent in their portfolios.

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Speaking at a breakfast hosted by BNP Paribas in Sydney, Mr Jenkyn-Jones said climate change is moving to the point where its risks can be measured.

"The financial community is starting to think, ‘maybe this is something that we can get our arms around’," he said.

Institutional investors are faced with the risk of have 'stranded assets' in their portfolios, he added. 

Mr Jenkyn-Jones said, however, it is up to investment consultants to come up with some "real hard numbers" to show investors what climate change could cost them.

"The only one that’s really done it so far is Mercer; they've done quite a lot," he said.

Local Government Super (LGS) is currently the sole Australian client of Impax AM.

"LGS are the most aware of these issues. They have specifically acted to mitigate these risks," Mr Jenkyn-Jones said.

But not all institutional investors around the world are as receptive as LGS to the arguments Impax AM presents, he added.

"There's obviously a spectrum. There are some [who say,] 'It’s just a load of rubbish. I don’t need to think about this, it’s not going to have any impact'," Mr Jenkyn-Jones said.

He used the analogy of a frog in a slowly-boiling pot of water to describe the investment community's attitude toward climate change risk.

"Similar to the frog, everyone is lulled into a false sense of security and it may be too late," Mr Jenkyn-Jones said. "That is more how one thinks the world at the moment is dealing with the threat of climate change.

"Then there are people who are feeling a bit 'warmer' and they can see this is a risk that they should be doing something about," Mr Jenkyn-Jones said.

 

 

 

 

 

Asset owners slow to act on climate change
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