Climate change poses multiple systematic risks and opportunities to investment portfolios. However, Australian investors seeking climate solutions face a number of challenges when selecting an external investment manager. These include lack of understanding of climate data to evaluate/measure, broad manager approaches to portfolio construction, limited product selection and concerns around “greenwashing”.
Using the Principles for Responsible Investment (PRI) framework1, we have listed some common questions that climate-aware investors should address when selecting an external investment manager.
1 Principles for Responsible Investment (PRI), Asset Owner Manager Selection Guide, 2018.
Investing involves risk including the risk of loss of principal. The returns on a portfolio of securities which exclude companies that do not meet the portfolio’s specified ESG criteria may trail the returns on a portfolio of securities which include such companies. A portfolio’s ESG criteria may result in the portfolio investing in industry sectors or securities which underperform the market as a whole
Exp. Date: 31/03/2022