While asset owners consistently cite climate-related themes and considerations as taking center stage, they are broadening their views beyond carbon to include a larger set of environmental issues, such as biodiversity, and a range of social and governance factors such as human rights, living wage, diversity, inequality and tax fairness.
This is according to recent qualitative interviews conducted with some of the largest asset owners in the world for the second annual Morningstar Voice of the Asset Owner Survey.
EMEA-based Independent Investment Consultant:
“I think much more than 5 years ago, 10 years ago for sure, there’s the awareness of climate change as an existential threat, but considering biodiversity—if our natural systems collapse, there’s nothing to do any more. That will actually ruin our economy and our society as well. So both climate change and biodiversity are important.”
MD of the Pension Investment Team, $17.2 billion Religious Organization Pension:
“There is going to be significant capital going to solve climate change and climate issues over the next 10 years, and as investors shouldn’t we be getting our portfolios in the way of those asset flows, capitalizing on those flows and avoiding those risks. Those are the kind of conversations that are happening today and need to be happening today.”
Thomas Kuh, Head of ESG Strategy, Morningstar Indexes:
“One of the key themes to emerge from the first phase of our global asset owner survey is the fact that asset owners globally are broadening and deepening their perspective on climate risk. While climate and other environmental factors are ascendant compared to social and governance factors, the largest global investors take an increasingly nuanced view on this area. We look forward to diving deeper into these and other issues in the next phase of our survey in the coming months, when we use these qualitative observations to delve deeper in a broader global quantitative survey.”
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