Asset Consultants Survey - The Climate Institute

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CLIMATE CHANGE INVESTMENT INITIATIVE UPDATE – Asset Consultants SurveyResults from the survey demonstrated that almost all of the asset consultants have notconsidered the impact of climate change legislation to the value of fossil fuel relatedinvestments. Most of the asset consultants (78%) have not considered this impact oncompany’s fossil fuel reserves and furthermore, none of the asset consultants were planningto provide services for clients to be able to calculate their portfolio wide fossil fuel balancesheet exposures.Q4.8 Recent Nature research highlighted that there are sufficient physical fossil fuelreserves (proven and probable) on investee company balance sheets to exceed the likelyforthcoming target policy agreements of 450ppm Co2-e? Are you aware of this research andwould you consider this in your advice to superfunds given the current state of variousrecycling technologies?Response %No 78%Yes 11%Did not provide response 11%Total 100%Q4.9 Would such research affect the advice you gave clients on investing in explorationassets?Response %Maybe, depending on client’s investment policy or portfolios 44%Yes 22%No 22%Did not provide response 11%Total 100%Q4.10 Do you plan to provide services for clients to be able to calculate portfolio wide fossilfuel balance sheet exposures?Response %No 100%Planning to in the next 12 months -%Yes, physical and debt related exposures -%Physical exposures only -%Debt related exposures only -%Total 100%PAGE 16CLIMATE CHANGE INVESTMENT INITIATIVE UPDATE – Asset Consultants Survey
CLIMATE CHANGE INVESTMENT INITIATIVE UPDATE – Asset Consultants SurveyIn relation to a timeline for considering risks and opportunities, approximately 55% of assetconsultants responded that the shortest time frame within which a risk or opportunity wouldneed to be evidenced for them to be able to make a recommendation was 3 years or more.Q4.13 In order for a risk or opportunity to be considered by your research staff, what is theshortest time frame it needs to be evidenced in returns for you to make a recommendationtoday:Response %3 years 33%Longer than 3 years 22%1 year 22%No minimum time frame / Did not respond 22%2 years -%Total 100%3.4. Integration of climate change management into services to superfundclientsIn the move towards incorporating climate change considerations, results from the surveyindicated that asset consultants believed that more active investment measures would benecessary to adequately address this. 56% of respondents thought that passive investmentstrategies were inadequate in addressing long-term risks, and a further 22% felt that passivestrategies would only be adequate if combined with other techniques.Q5.2 Regarding portfolio construction, do you believe that passive investment strategiescan adequately deal with long-term risks such as climate change?Response %No, the nature of those strategies exposes them to climate change risks andopportunities.56%Yes 11%Yes, if used in conjunction with a hedging or balancing strategy 11%Yes, by allowing a permissible tracking error to account for balancing climatechange risk.11%Did not respond 11%Total 100%Despite the current lack of incorporation of climate change issues within the regularinvestment process, it was very encouraging to find that 56% of respondents have providedadvice which led to climate change related investment decisions. Renewable energyinvestments was the most common outcome of this applying to 33% of respondents.CLIMATE CHANGE INVESTMENT INITIATIVE UPDATE – Asset Consultants Survey PAGE 17
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Asset Consultants Survey - The Climate Institute

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