WWF’s Climate Guide for aligning investment portfolios to the Paris Agreement

WWF’s Climate Guide for aligning investment portfolios to the Paris Agreement

Jun 21, 2018
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Image credit: WWF
Thursday, June 21, 2018

Switzerland – WWF has published a climate guide for asset owners. In this guide the Switzerland-based organisation has assembled 15 recommendations to support institutional investors and their service providers and show them how to reconcile their investments with the goals of the Paris Agreement on Climate Change.

Climate change has been described as ‘the tragedy of the horizon’ by Mark Carney, Chairman of the G20 Financial Stability Board and Governor of the Bank of England, because it imposes a cost on future generations that the current one has no proper incentive to fix. However, the transition to a low carbon economy also offers significant investment opportunities, the WWF Switzerland writes in its recent climate guide.

Working with many stakeholders the WWF has assembled 15 topline recommendations, that support asset owners and show how they can align their investments with the objectives of the Paris Climate. Amongst these 15 recommendations are:

  • Asset owners should assess the evidence of climate-related financial risks and opportunities: extensive research shows these are significant and multi-faceted, across all asset classes and all time frames.
  • Asset owners should measure and publish both the climate risk exposure and the climate alignment of their portfolio, using a few available complementary tools enabling forward-looking climate scenario analysis at portfolio level.
  • Asset owners should anticipate regulatory obligations to assess climate-related financial risks and opportunities and climate alignment of portfolio: to prepare for this, asset owners should implement the TCFD recommendations as from the 2018 reporting cycle.
  • Asset owners should adopt an investment policy that reflects and implements their climate-related investment beliefs – including investment targets, strategic asset allocation, engagement objectives, selection criteria and incentives for all service providers, and performance measurement and reporting.

The full summary of recommendations and the climate guide can be found here.

Image credit: WWF