Australia’s carbon tax will force capital markets and investors to account for climate change costs and risks, says investment consultants Mercer.

Two Australian superannuation funds, the $42 billion fund AustralianSuper and the $8.5 billion fund VicSuper, have been surveyed by Mercer in its global survey of fund managers and climate change, says Helga Birgden, head of responsible investing Asia Pacific at Mercer.

Mercer, whose survey of fund managers encompassed about $2 trillion in assets under management, says fund managers must now “kick the tires” of their investment portfolio to account for climate change and the carbon tax.

“Developing a framework to consider the carbon tax and climate change is vital, particularly at a strategic allocation stage,” says Birgden.

Michael Dundon, chief executive of VicSuper, says the introduction of a carbon tax has made investing clearer.

VicSuper has been debating how climate change may affect its investments for five years.

“The carbon tax clarifies our investment evaluation toward those companies that have major exposure to brown coal,” says Dundon.

“There is no specific plan around the carbon tax but we’re looking for more sustainable investment opportunities as sustainable investments will provide better returns,” he says.