Only 40% of senior executives incorporate climate-change factors into investment decisions, despite three-quarters believing they are important, according to the CFA Institute.
In a report launched Wednesday, the CFA examined the impact of climate change risks on investment decisions, calling on top investment professionals among its members to follow global standards set by the Sustainability Accounting Standards Board as well as the guidelines under the Task Force on Climate-related Financial Disclosures.
In efforts to support reliable carbon pricing, the CFA Institute also said policymakers should ensure that the regulation of carbon markets supports market transparency, liquidity and easy access for global market participants.
The CFA Institute also made a number of recommendations to investors, including that they account for carbon prices and their expectations thereof in climate risk analysis.
Investors should also engage with issuers to ensure that climate data and related disclosures are sufficiently thorough to support their climate risk analysis in their investment processes, the CFA said.
"Financial professionals need to be equipped with the best tools and training around climate change analysis in order to make investment decisions that take climate change into consideration," Margaret Franklin, president and CEO of the CFA Institute, said in a news release.