ASSET OWNERS DISCLOSURE PROJECT

GOES FROM STRENGTH TO STRENGTH

The Asset Owners Disclosure Project has made two high profile appointments to its board as it heads towards its new global disclosure cycle in 2012.

Former Australian Federal Opposition leader John Hewson and International Trade Union Confederation General Secretary Sharan Burrow have joined the AODP board. Both Hewson and Burrow have extensive international experience working on the role of the financial system to manage the risks and opportunities posed by climate change.

Large asset owners in the financial system - including pension, super, insurance and sovereign wealth funds – control over $70trn of capital and how they manage that capital is crucial in the transition to a low-carbon economy.

Hewson, who becomes Chair of the Asset Owners Disclosure Project, said “It is critical that we create more competition between the largest asset owners when it comes to managing climate change risks and opportunities. I look forward to guiding the Asset Owners Disclosure Project through its next phase of development to become the world’s leading rating organisation of asset owners and assisting asset owners towards best practice in a carbon-constrained economy.”

Burrow added “Climate change cannot be solved by policy alone and it requires trustees to embrace whatever change is necessary so that climate risk can be managed to the benefit of all their members. The stakes are incredibly high and we quickly need to protect workers’ capital against yet further systemic financial crashes like the one we are experiencing now.”

Asset Owners Disclosure Project Executive Director Julian Poulter said “JohnHewson and Sharan Burrow’s vast experience and diverse perspectives will ensure the best possible approach to reflect the interests of all stakeholders.”

The Asset Owners Disclosure Project will launch its new ratings system later this year and aims to rate funds with over $60 trillion worth of combined capital in the next year. There will be further announcements about board appointments and new initiatives through the year.

Mr Poulter added “These appointments further cement Asset Owners Disclosure Project's focus on both the macro and micro impacts involved in climate change risk.”

Ms Burrow said “Climate change is the major challenge of the 21st Century and it is a key proxy for how asset owners deal with many other environmental, social and governance issues. The asset owners ultimately control how our investments are made and therefore how the opportunities for sustainable portfolios, jobs and economies are developed.”

“Stakeholders of all types need to see which asset owners are leading and by how much and who the laggards are so we can create pressure to drive change and move towards a more effective hedging of fund portfolios and a more robust financial system to deal with climate change,” said Mr Hewson.

ASSET OWNERS DISCLOSURE PROJECT

The Asset Owners Disclosure Project is an independent global not-for-profit organisation whose objective is to protect members' retirement savings from the risks posed by climate change. We aim to do this by helping funds to redress the huge imbalance in their investments between high-carbon assets (50-60% of a portfolio) and low-carbon assets (typically less than 2%) and realigning the investment chain to adopt long-term investment practices. Key elements of the initiative are:

Conducting an annual survey and assessment of the world’s 1000 largest asset owners pertaining to their management of climate change risks and opportunities.
Publishing rankings of the world’s 1000 largest asset owners to allow members, stakeholders and industry to see which funds are better than others at managing climate risk.
Providing and promoting climate change best practice to drive and improve climate change management and capability of asset owners.
Developing consumer-facing programs to educate asset owner’s members or stakeholders of the financial risks associated with climate change.
Researching trends in climate risk, member behaviour and institutional investment.
Creating frameworks to encourage active ownership.

GLOBAL CLIMATE INDEX 2013-14

The second ever Global Climate Index demonstrating how the world’s biggest investors are managing climate risk has revealed that many of the world’s investment funds are setting investors up for massive losses through exposure to these risks.