Papers helping investors to understand and tackle the issues relating to carbon risk exposure
The investment issues relating to carbon risk and climate change are multi-faceted. In Dec 2016, the FSB (Financial Stability Board) recommended that portfolio managers should report on carbon exposure in their portfolios, and many funds are working towards this. But optimal solutions to managing carbon risk are complex.
Below, the Savvy Research team has selected a "top 10" of recent papers which cover the issues of carbon, climate change and the environment, from a long-term, portfolio management perspective.
How investors can leverage carbon data (UBS Asset Management, May 2017)
This paper by UBS Asset Management examines how the fund management industry can leverage its carbon data into making investment decisions.
The Carbon Scorecard (S&P Dow Jones Indices, May 2017)
The Financial Stability Board recently recommended that fund managers should now report on the carbon exposure in their portfolios. This report assesses the carbon risks and opportunities of major global equity indices.
Sustainable Finance Report (Deutsche AM, June 2017)
(This paper is not accessible in certain geographies)
This 71-page paper by Deutsche Asset Management examines how activity in sustainable investing is gathering momentum. It looks into key trends such as asset owner demands, fiduciary duty, regulatory requirements, and climate change
Resource & Environment Issues: A practical guide for pensions actuaries (IFoA)
This guide by the Institute & Faculty of Actuaries explains where Resource and Environment (R&E) issues are relevant to pension schemes and the work of pensions actuaries..
Recommendations on Climate-Related Financial Disclosures (FSB, Dec 2016)
This paper has been authored by FSB Task Force on Climate-related Financial Disclosures. It provides important recommendations for relevant and appropriate disclosures by companies, as requested in the FSB’s proposal.
Stranded Assets: What lies beneath? (UBS Asset Management, 2016)
This paper by UBS Asset Management examines the core of the stranded assets hypothesis. It considers the origins and basis for the idea and it analyses how it can information investment strategy today.
Fossil Fuel Divestment: A practical introduction (MSCI, 2016)
This brief by MSCI is aimed at asset owners facing the possibility or necessity of divesting from some type of fossil fuel holdings.
Strategies for Adapting Portfolios to Climate Change (BlackRock, 2016)
This paper details how investors explore opportunities and mitigate against climate risks. It concludes that climate-aware investing is possible and doesn't have to compromise traditional goals of maximizing investment returns.
The Equity Investor's Guide to a Low Carbon Economy, 2015-25 (Goldman Sachs)
This 50-page report from Goldman Sachs examines the low carbon world that we are moving towards, with a focus on low carbon technologies and low carbon regulation.
2017 ESG Trends to Watch (MSCI, April 2017)
This ESG paper explores the state and outlook for ESG investing. The authors examine key trends, with a specific focus on China and India.
ESG Institutional Investor Survey: Performing for the Future (SSGA, 2017)
This 24-page paper examines the challenges that inhibit greater ESG adoption. It describes the pathways that are evolving to make facilitation into the investment process much easier.
Seven steps to ESG integration (Robeco, May 2017)
Sustainability investing is here to stay, and in this 48-page report, Robeco sets out a seven-point plan for integrating sustainability into the investment process.