Investing to tackle climate risk - Investec Asset Management (becoming Ninety One)

Many argued that investors didn’t have the information they needed to respond to rising risks of climate change. Now, it is a different story.

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In the race to prevent irrevocable damage to our planet, pension funds have an opportunity to tackle climate risk head-on. The UK’s Department of Work and Pensions (DWP) also requires pension schemes to explain to their members how they’re accounting for climate risk. For pension schemes, whose role is to allocate capital to manage risks and seek opportunities to protect people’s financial future, this poses an unnerving question – are we doing enough?

Investec Asset Management have defined an investible universe using a proprietary model which actively reduces carbon emissions and includes companies that benefit from the structural growth areas of a de-carbonising economy. What is striking is that this universe has little or no overlap with traditional equity allocations such as the MSCI All Country World Index or the FTSE 100.

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