Barely 10% of funds aligned their targets with the Paris Agreement. Colossal sums are therefore at the mercy of a possible shock linked to climate risk.

AODP recently published a ranking of the most virtuous pension funds in terms of taking climate issues into account

The message from IPCC researchers has apparently not yet reached all sectors of finance. According to a study by the Asset Owner Disclosure Project (AODP), just ten of the top 100 public pension funds have committed to aligning their investment portfolios with the goals of the Paris Agreement.

More broadly, 35% would specifically mention the climate issue in their investment policy, notes the firm specializing in environmental issues. And only 12% have pledged to exclude any investment related to the coal industry.

The vast majority are content to say they want to invest in companies and promote climate issues and the reduction of greenhouse gas emissions, without quantified objectives.

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As for the remaining 65%, they simply do not mention climate change in their investment policy.

While this is of course bad news for the climate – the IPCC researchers say that we have barely a few years left to avoid a runaway of the phenomenon of global warming – AODP says that it also represents a big danger to the assets concerned and that it would therefore be in the interest of investors to pay attention to it.

$ 9.8 trillion in potentially threatened assets

Because in total, 87% of the assets of the 100 largest pension funds have not been subject to Carbon 4 will measure the exposure of financial assets to climate risk related to the transition to a low-carbon economy.

This means that around $ 9.8 trillion in assets would be at the mercy of economic shocks that could arise from the effects of climate change, such as storms, hurricanes or rising sea levels.

By definition, the assets of pension funds must be insured over the long term, in the interest of their beneficiaries. Not taking into account the climate risk therefore seems all the more surprising at a time when alerts are increasing.

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AODP recently published a ranking of the most virtuous pension funds in terms of taking these issues into account. It emerges that the European funds are placed at the top of the table, and in particular the Swedish funds. France occupies second place in the ranking thanks to the Reserve Fund for pensions.

AODP believes that article 173 of the law for the energy transition which obliges investors to account for the “physical and transition risks” of their portfolios has played an important role in the good performance of French insurers.