Fourteen major worldwide pension funds, including CalPERS, CalSTRS and the Norwegian Government Pension Fund-Global, are supporting a Mercer study to identify the potential impact of climate change on asset allocation over the next 40 years.
Mercer expects to issue the study in the fourth quarter and make it available to the public, according to a statement from Mercer.
Grantham Research Institute on Climate Change and the Environment and Vivid Economics also will assist in research on the economic and financial impact of climate change scenarios.
The study, initiated by Mercer in collaboration with funds, seeks to identify possible risks and potential investment opportunities related to climate change on asset classes and economic sectors in different regions worldwide through 2050.
Each pension fund involved in the study, as well as other investors that did not want to be publicly named, will receive its own tailored report assessing the effects of climate change on its asset mix and also identifying investment risks and opportunities, the statement said.
The study is being funded by the pension funds and the other investors, as well as Carbon Trust, an independent company set up by the U.K. government to promote a low-carbon economy, and the World Bank’s International Finance Corp., which invests in emerging markets, said Mercer spokesman Bruce Lee.
Along with the $202.1 billion California Public Employees’ Retirement System, $131.1 billion California State Teachers’ Retirement System and the 2.59 trillion Norwegian kroner ($424 billion) sovereign wealth fund, also involved with the study are AP1; APG Asset Management, manager for the Dutch pension fund ABP; PGGM Investments, which manages the Dutch fund Zorg en Welzijn; British Columbia Investment Management Corp.; Environment Agency Pension Scheme; Maryland State Retirement and Pension System; Ontario Municipal Employees Retirement System; and Australian defined contribution plans AustralianSuper and VicSuper.