Pension Trustees: A Climate for Change

Pension trustees have a duty to address the financial risk posed by climate change as part of their fiduciary role in managing risk and maximising return across plan investments, according to a new report issued by the Carbon Trust – “A Climate for Change: A Trustee’s Guide to Understanding and Addressing Climate Risk”. The report, prepared for the Carbon Trust and the Institutional Investors Group on Climate Change (IIGCC) by Mercer Investment Consulting, is designed to raise awareness of the relevance of climate change as a fiduciary issue and to demonstrate the opportunities that exist for pension trustees to take action. According to the report, virtually all classes of pension assets have the potential to be affected by climate change. This will be felt either directly - for example in terms of damage to agriculture or real estate – or through policy-driven strategies to mitigate climate change, such as in the energy and automotive industries. It is these potential and currently unknown risks that make addressing climate change consistent with the fiduciary responsibilities of pension fund trustees.
Carbon Trust : Pension Trustees