Japan’s $1.6tn state pension fund has joined forces with the California State Teachers’ Retirement System and UK-based USS Investment Management to launch an attack on “short-termism” by companies and asset managers.
The joint statement — which the trio say is more relevant than ever given current market turmoil — marks a sharp break with the traditional silence of the big public asset owners.
These pension funds have tended to leave public commentary on market structure and sustainability issues to asset managers, such as Larry Fink, the chief executive of BlackRock, who recently called on companies to adhere to strict sustainability standards.
However, in a letter published on Wednesday on the websites of all three funds, Japan’s Government Pension Investment Fund said that a focus on short-term returns laid their portfolios open to “potentially catastrophic systemic risks”.
The warning cited a forecast by Moody’s Analytics that climate change alone had the potential to destroy about $69tn in global economic wealth over the next 80 years.