A third of asset managers not engaging on climate change

According to a survey from Redington’s manager research team, only 62% have an ESG engagement policy

A third of asset managers (39%) were unable to provide a single example of a climate change related engagement effort despite 76% saying they “consider climate related risks and opportunities”, according to a recent survey from Redington’s manager research team.

The study, which spoke to 104 managers globally representing more than £7.81trn assets under management, also found that only 60% of managers can provide an example when climate related risks and opportunities influenced buying or selling decisions, while only 62% have an ESG engagement policy.

Redington head of manager research Nick Samuels said this discrepancy highlighted that, despite engagement "seemingly increasing", this has yet to translate into "concrete and consistent portfolio decisions".

He added: Climate change is a widespread and global problem, impacting all sectors of the economy in one way or another. We would expect all our managers, regardless of asset class, to have at least one, if not several, examples of climate change related engagements with their portfolio companies.

Managers who thoroughly analyse - and take action on - risks are crucial to driving progress so, moving forward, we strongly hope to see this number increasing, Samuels said.

Also highlighted by the report was a lack of engagement with the task force on climate-related financial disclosures (TCFD), with only 28% of managers currently reporting according to the guidelines.

However, Redington also noted that it expected to see "significant improvement" over the coming months, with 50% of managers surveyed currently "considering adoption" of the TCFD guidelines.

Samuels added: While the positive momentum is clear, we simply have to raise the bar on climate change. Investors have the power to push for real action from policy makers and businesses to address a whole range of issues that fall under the banner of ESG.

He said, as an industry, we have a responsibility to ensure they have the tools and knowledge to properly address the climate related risks that arise in their portfolios. The pivotal role financial institutions have to play in shaping the world of tomorrow cannot be underestimated, and we must embrace the responsibility that comes with it.