Only one in eight insurers worldwide is taking tangible action to address climate change risk, according to a report Thursday by the Asset Owners Disclosure Project. Focusing on 116 insurers with $15.3 trillion in investments and 324 pension funds with $15.9 trillion, AODP found that 26 pensions funds and only one insurer rated A+ on their management of climate change risk. “Across the Index just 14 insurers, one in eight, are taking tangible action to manage climate risk in their portfolios, rated C+, compared with one in four pension funds,” the report says.
The AODP rates the world’s biggest investors, a group consisting of pension funds, insurers, sovereign wealth funds, foundations, and endowments, “on their success at managing climate risk within their portfolios, based on direct disclosures and publicly available information.” Investors taking climate action are rated from AAA to D. Those investors taking no action are given an X rating. The scale is based in three deliverables: engagement, risk management, and low-carbon investment.
“While they may be considering the effects of climate change on their liabilities, the vast majority of insurers are overlooking the impact of the low-carbon transition on their investment portfolio. Just 1 [percent] consider the risks of stranded assets, compared with 6 [percent] of pension funds,” the report says.
