The tip of the iceberg:
How UK institutional investors are responding to climate risks
The IPCC’s sixth climate change report published in August 2021 gave a clear statement on the realities and risks of climate change. But what could the government policy response to this mean for investors looking to manage risks and fulfil fiduciary duties, and where do the opportunities exist?
For our latest report, we carried out an extensive climate risk profiling of a large dataset of UK institutional investors. Three key themes emerged:
- Risks – find them, understand them. 50% of UK asset owners have significant climate transition risks in their portfolios.
- Net Zero – the standard for investor climate action and risk management.
- Opportunities – a low carbon transition means a once in a generation flow of capital. 90% of UK institutional investors could significantly reduce their climate risk exposure over the next decade.
This report was initially published in September 2021 and updated in December 2021.
- Conclusions and next steps for asset owners, asset managers, advisers, government and regulators.
- Our five-tier scale, which provides a straightforward way to triage an institutional investor’s exposure to climate related risks in their portfolio.
- Three practical steps in equities, corporate bonds and gilts to better align them with the goals of the Paris Agreement.
How we can help
We help central banks design and implement investment strategies to get the most out of their reserves in a risk-controlled manner.
We help charities and endowments construct investment strategies and pick the right investment funds to both meet their financial objectives and be aligned with their missions.
We help you get your investment strategy right to ensure good member outcomes in your DB and DC schemes.
Our investment team works with trustees of DB and DC schemes to set bespoke investment strategies and select fund managers. Using our market-leading technology, we help you navigate your journey by providing you with clear, actionable insights which enable you to make better short and long-term investment decisions.
We help our clients understand and implement responsible investment principles.
Every sovereign wealth fund has its own unique circumstances and challenges. As an independent consultancy, we’re not linked to any asset manager and we don’t sell investment products.