It is in investors’ best interest to support the low-carbon transition
Institutional investors of all stripes — from those responsible for paying pensions or endowment grants to those providing wealth management products — collectively manage trillions of dollars globally. They each have varying objectives and portfolio allocations and function within different regulatory requirements and contexts. However, they are typically true long-term investors, allocating across the global economy to deliver returns to members, beneficiaries and stakeholders over multiple years or decades.
Recently, evidence has grown to demonstrate substantial climate-related financial implications for investors. As such, financial regulators are increasingly formalizing the expectation that investors consider the materiality of climate-related risks and manage them as part of their fiduciary duties — particularly for pension funds.
Two key elements necessitate this fiduciary duty alignment: financial materiality and growing legal and regulatory consensus.
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