The fifth annual survey of the AODP rated Australia's Local Government Super number one in the world for asset owners that deal with the risks associated with climate change, with First State Super coming in third. The New Zealand Super Fund made a huge leap from 94th to 15th, and New Zealand overall moved to number three globally, up from 10. Australia came in 5th overall.
The Asset Owners Disclosure Project (AODP) rates big global investors, with Australian and New Zealand funds ranking very highly on how they deal with climate change risk. The AODP is an independent non-profit organisation that assesses the financial risks of climate change, creating a framework for disclosure and management of those risks by institutional investors.
The best and worst climate change risk assessors
According to the report, the United States and China rated very poorly for climate change risk considerations inside their pension and sovereign wealth funds, but the US came in both at the top and bottom in different categories.
Asset managers (as opposed to owners) like Australia's Macquarie Bank came in number one in the APAC region, but that is with a 'D' rating. Asset owners in the APAC area typically rated a 'B'. APAC-based asset owners tended to do better than outsourced managers, and asset owners appear to be putting more effort into climate risk assessment than asset managers.
Sixty per cent of asset owners (up from 41 per cent) are making moves to address climate change risks, propelled forward by the Paris Climate Agreement in late 2016.
Oceania and Europe are doing it best
The report declared Oceania and Europe to be the most progressive areas globally, with the top performers including Australia, New Zealand, the Netherlands, Ireland and Scandinavia.
Transitioning to the low-carbon economy
The authors state in the report that if asset owners in the US (worth US$10.3 trillion in assets, a quarter of the index) followed the climate change lead of Australia, New Zealand, and Europe, we could be living in a low-carbon economy sooner rather than later.