Climate change has been considered and incorporated as an investment risk, including in relation to product strategy.
As a strategic response in 2015, a Climate Change working group was formed (joining the existing Stranded Assets Working Group) as a sub group of the Global ESG Committee. The group was charged with developing guidance for all investment teams on the integration and management of climate change risks and opportunities. The output has been integrated into organisation-wide governance structures and broader responsible investment strategy. Given the diversity of our investment capabilities and consequently the range of risks and opportunities posed by climate change, we believe this integrated approach is more effective than a stand-alone strategy. The key elements of our Responsible Investment Strategy which are directly related to climate change are:
- Integration of carbon and other climate related data into our systems and reporting processes including portfolio assessments for climate change risks.
- Actively engaging with our clients to ensure we can anticipate and meet their needs now and into the future.
- Including climate change as part of our training program for example by inviting in external experts to present and engage with our investment teams.
- Improved disclosure of climate change as a material business and investment issue.
- Continued support of the IGCC and other industry bodies who are working on climate change.
Climate change, and in particular the carbon exposure of portfolios, was raised at the Global Investment Committee in March 2016. In December 2016 we appointed MCSI to provide carbon and related data which we are now regularly reporting to the committee and also publicly. The Global Investment Committee is responsible for monitoring the risk and performance of all investment capabilities across our global business and meets quarterly. The committee is chaired by the CEO and includes the Chief Investment officers of each asset class and the Global Head of RI.
We have prepared our climate change disclosures to align as much as practicable with the TCFD and The Global Investor Coalition on Climate Change - Guide to Investor Disclosure.
In addition each investment team is required to provide a climate change statement in their team profile on our public website so that the way they consider climate related risk in their specific investment strategies is clear to clients and other stakeholders.