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Major investors call for transparency and GHG reduction within the industry

Major investors call for transparency and GHG reduction within the industry
GHG emissions now considered an investment risk. Photo taken from U.N.E.P.

Major investment firms are calling for transparency in the reduction of greenhouse gas emissions that are associated with their industry’s investments and portfolios.

The call to action, which was made in an investor briefing by the United Nations Environment Programme Finance Initiative, was made in order to reduce policy, regulatory, and financial risks associated with GHG emissions when it comes to investments and the investment industry’s portfolio.

Major investment firms – such as Allianz, Aviva, Hermes, HSBC, Eurizon Capital, Inflection Point Capital, Pax World Investments, Robeco SAM, and Trillium Asset Management – argue that investors should use and understand carbon footprinting to assess and mitigate portfolio carbon risk.

It is projected that the build-up of GHG policy will accelerate in the coming years, and because of this, advocacy groups, civil society organizations, and other stakeholder groups are demanding investors to start measuring and disclosing GHG emissions that are embedded in their portfolios, and that investors should take action to reduce them over time.

“Information on the carbon intensity, performance and climate risk exposure of thousands of companies is now publicly and readily available. But unless we reach a similar level of transparency among investors, we won’t know whether that information is used or not, nor whether it is helping to deliver the low-carbon economy,” said Gianluca Manca, Head of Sustainability, Eurizon Capital, and co-chair of the U.N.E.P. F.I. Asset Management Working Group.

In the briefing, it was argued that from an investor perspective, GHG emissions must be better understood, measured, communicated, and mitigated, because it can lead to financial risks that are regulatory or reputational in nature.

“Investors are starting to realize that greenhouse gas emissions increasingly represent a material risk for companies and their investors. It is just a matter of time before fund managers start to systematically assess and reduce the carbon embedded in their portfolios,” said Matthew Patsky, chief executive officer of Trillium Asset Management.

Because of the risk that GHG emissions have for companies and their investors, U.N.E.P. F.I., together with the Greenhouse Gas Protocol – the global standard for GHG accounting and reporting – is developing guidelines that are tailored for the needs of investors and other financial intermediaries. – EcoSeed Staff

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