Pension funds clueless on climate change risks
Investors, insurance firms, and financial providers must engage with climate change or risk their business model becoming obsolete, an industry expert said this week.
John Davies, head of business law and pensions specialist at the Association of Chartered Certified Accountants (ACCA), said getting to grips with climate change is in the best interests of all financial services providers.
“Climate change is such a critical issue for the financial services industry, for the economy and for society as a whole that it must be addressed by the financial sector,” Davies said.
His comments followed an ACCA-commissioned survey of pension fund trustees which found a “significant lack of awareness, knowledge and understanding” of the potential impact of climate change on pension funds.
Jill Solomon, professor at Kings College London, where the research was conducted, said: “Trustees simply did not appreciate the links between climate change and the performance of their pension funds.”
She added: “Protecting pensions against material financial risk is crucial to society’s future welfare.
“Pension fund trustees are in a unique position, with significant power to affect corporate behaviour through the strategy they implement in their pension funds, as pension funds own the largest proportion of shares in UK listed companies.
“Climate change is a critical issue which requires immediate attention from the pension fund community.”
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