Wilshire Consulting on Wednesday unveiled a program to help clients “understand and make informed decisions about the risks and opportunities associated with climate change,” including in money manager selection and investments, the Wilshire Associates unit said in a news release.
Called ClimateLens, the four-step program “advises clients to approach climate change as a broad exercise in risk management, which includes both active engagement and thoughtful investment solutions,” the news release said.
“It would not be inconsistent with an investor’s (fiduciary) duty to consider environmental facts to determine if these factors could potentially affect — negatively or positively — the expected financial returns of investments,” said Andrew Junkin, Wilshire Consulting president, in the release.
“Note we are not arguing that asset owners have a fiduciary duty vis-a-vis climate change that requires them to change their investment process or portfolio,” according to a Wilshire Consulting report accompanying the release and co-authored by Mr. Junkin along with Angelo Calvello, publisher, and Cary Krosinsky, editor, of The Journal of Environmental Investing.
Mr. Junkin said in the release, “Not only can climate change expose asset owners to new investment risks such as those associated with future climate-related regulation and policy, but it also can present asset owners with new investment opportunities across asset classes. Regardless of one’s own belief on the subject, climate change deserves consideration by investors, in keeping with their mandates, investment horizons, and ultimate goals.”
The ClimateLens program consists of four steps: education, looking at risk-return considerations; assessment, involving the “evaluation of climate-related investment and risk exposure in the context of investment objectives; planning in how policies, risk management and operations can be modified to better manage climate-risk exposure; and implementation in the portfolio.
