But talk about such brilliant breakthroughs was tempered with warnings of a clean-tech investment bubble and the need for fund managers and trustees not to lose sight on what makes a good investment. Indeed, many in the investment industry are predicting that some of the best-value opportunities in a post ETS world are likely to be mainstream – such as large-scale infrastructure investment, the building of new power stations or the design of energy-efficient buildings.
As major asset owners, super funds are perfectly placed not only to pressure companies to reduce their emissions but to encourage both the corporate sector and governments to investigate, develop and invest in these new forms of wealth creation. This is a form of wealth worth having.
Yes, climate change is a complex issue and it’s a debate that not everyone will understand, or want to hear. But it’s only a matter of time before terms like carbon footprint and carbon optimisation become part of everyday language and shareholders start latching onto the concept of carbon risks. Climate change will not disappear like some of the many transient issues that our industry sees.
There are few certainties surrounding our investment landscape but one certainty is that the management of climate change risk and the opportunities that will follow will grow rapidly over the coming years. No-one can have failed to notice that climate change has emerged as one of the cornerstone issues relating to real material returns from all asset classes. It’s a natural progression that the structures, processes and skills for managing climate change are elevated further up the chain to us, the asset qwners, who are ultimately responsible for the impacts on returns.
To that end, AIST has partnered with the Climate Institute to launch a world first Asset Owner’s Climate Change Disclosure Initiative. Super funds will soon have no choice but to start walking the talk.