Local super body praised as forward-thinking fund
Many big investors still consider climate change as a “load of rubbish” and a risk that they “don't need to think about”, one insider says.
Impax Asset Management director Bruce Jenkyn-Jones has used a visit to Australia to talk to institutional investors about the climate change risk they carry in their portfolios, but may be totally ignore.
Impax is a London-based firm that focuses on resource scarcity and clean energy, targeting the behaviour (good and bad) of listed and private equity groups.
Speaking at an event for BNP Paribas in Sydney, Mr Jenkyn-Jones said climate change risks can be measured, and should be factored.
“The financial community is starting to think ‘maybe this is something that we can get our arms around’,” he said.
If not, he said, institutional investors could find themselves with ‘stranded assets’ in their portfolios.
But the work is not easy, Jenkyn-Jones said, requiring investment consultants to come up with “real hard numbers” on the costs of climate change.
Australia’s Local Government Super (LGS) Impax AM’s sole client in the country.
“LGS are the most aware of these issues. They have specifically acted to mitigate these risks,” Mr Jenkyn-Jones said.
Unfortunately, he said not all institutional investors worldwide are as receptive as those looking out for Australia’s local government funds.
“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.
“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.