AMP Capital has been assessing the climate risks of its investments for over a decade, engaging with companies and taking an active part in policy discussions. However, two recent events have highlighted for me the rise of consumer consciousness in relation to climate change, as investors increasingly consider and act on climate change risks to their investments.
Climate change was a key theme at the RI New Zealand 2017 responsible investment conference held in Auckland recently. A key outtake from this conference was the way responsible investors are responding to climate change risks and the increasing momentum for implementing policies to combat climate change risk. At the same time, in an increasingly open, digital world where authenticity is key, businesses must keep up with growing demands for ethical behavior, transparency and accountability.
There are some encouraging trends emerging, with more companies stepping up their response to climate change such as setting more ambitious carbon emissions reduction targets. But, there is also no doubt in my mind that more companies need to act quickly and accept greater accountability for climate change issues within the boardroom. This pace of change needs to accelerate if we are to meet the goals of the Paris climate agreement and ensure long-term financial and climate stability.
On the issue of climate change reporting, each year the AMP Group takes part in the global Carbon Disclosure Project (CDP) climate change survey. A questionnaire is sent out to over 5600 companies, cities, states and regions around the world report on and disclose their environmental impacts. Companies are scored on a range of measures including emissions management, governance and strategy, climate change related risks and opportunities, and quality of the third party verification of emissions.
I am pleased to report that, for the first time AMP has received a Leadership band score of A- (on a scale of D- to A), placing AMP in the top 22% of scoring companies! The score reflects AMP's leadership in climate change management, including efforts to reduce the carbon footprint of our offices and being a carbon neutral company. A copy of the feedback chart with AMP’s climate change scores can be found here.
Also, Adam Kirkman, Head of ESG, and I spoke at an event in partnership with the Sustainable Business Network, to ‘lift the bonnet’ on responsible investing and help their members learn a little bit more about the concept. As part of the conversation, the issue of climate change came up and in this short clip I talk a bit more about what we’re hearing from clients, and AMP Capital’s approach to measuring and managing this risk within a portfolio.
For further information on AMP Capital’s responsible investment philosophy and range of responsible investment funds, please visit the responsible investment section of our site.
This blog post has been prepared to provide general information and does not constitute 'financial advice' for the purposes of the Financial Advisors Act 2008 (Act). An individual investor should, before making any investment decisions, consider the information available in the relevant Product Disclosure Statement and seek professional advice. While every care has been taken in the preparation of this document, AMP Capital Investors (New Zealand) Limited and the AMP Group (together, 'AMP') make no guarantee that the information supplied is accurate, complete or timely and do not make any warranties or representations in respect of results gained from its use. The information is not intended to infer that current or past returns are indicative of future returns. The views expressed are those of the author and do not necessarily reflect those of AMP. These views are subject to change depending on market conditions and other factors.