The Asset Owners Disclosure Project’s (AODP) annual index [pdf] of 500 of the largest global asset owners found that 232 of them had done little or nothing to protect their investments from the financial upheavals predicted due to climate change.
Financial experts, including the president of the World Bank and the governor of the Bank of England, have warned that fossil fuel assets are risky investments because their reserves of coal, oil and gas cannot be burned if the world is to avoid the most extreme impacts of climate change.
A landmark report in 2013 showed that if these assets became “stranded” – suffering large-scale loss of value – it could destabilise global financial markets.
Julian Poulter, the CEO of AODP, said around 50% of assets held by the funds were exposed to some kind of climate risk, but many pension funds and other foundations are ignoring that risk and “betting on business as usual”.
He said these asset owners were gambling that nothing would be done to curtail the burning of fossil fuels.
“They’re betting around 20-1 that either the fossil fuel company influence will last forever or that their fund managers will bail them out of a crisis – but that didn’t work too well during the last systemic crisis did it?” he said.
Funds the AODP termed as “laggards” were those that received a D or X rating. These included the Wellcome Trust and the Bill and Melinda Gates Foundations, both of which are the subject of a Guardian campaign requesting that they divest from fossil fuel companies. It also included some of the world’s biggest pension and sovereign wealth funds.
Read more at Nearly Half of Top Pension Funds Gambling on Climate Change
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