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INVESTING/PORTFOLIO STRATEGIES

Global asset owners, managers launch initiative to track shift to low-carbon economy

Coal plant
Coal plant

A group of global asset owners and asset managers with more than £2 trillion ($2.4 trillion) in combined assets launched the Transition Pathway Initiative on Wednesday, an effort to monitor how the global migration to a low-carbon economy affects their investments, according to a news release from the Church of England.

The initiative will assess how individual companies are positioning themselves for the transition to a low-carbon economy through a publicly available online tool, designed to support the requirements of the Task Force on Climate-related Financial Disclosures. FTSE Russell provides the data for this tool. Investors can currently view reports on companies in the electric utilities, oil and gas sectors. More sectors will be available later in the year.

The members of the initiative are Swedish pension funds AP1, AP3 and AP4 in Stockholm; Dutch pension fund PGGM in Zeist; London-based RPMI Railpen, Universities Superannuation Scheme and Local Authority Pension Fund Forum; Bristol, England-based Environmental Agency Pension Fund; Wespath Benefits and Investments, Church of England Pensions Board; CCLA Investment Management, which manages assets for the Church of England; Central Finance Board of the Methodist Church; Church Commissioners; Hermes; Standard Life Investments, Aviva Investors and BNP Paribas Investment Partners.

“The initiative will identify companies that are aligned with the transition to the low-carbon economy and those most exposed to climate transition risk,” said Adam Matthews, co-chairman of the initiative and head of engagement for the Church Commissioners and Church of England Pensions Board, in a news release.

Emma Howard Boyd, chairwoman of the U.K. Environment Agency, added in the news release: “Asset owners from around the world are sending a strong signal that portfolios will align in the future with companies that are taking the transition to a low-carbon economy seriously.”