Two Australian superannuation funds have joined 13 institutional asset owners and investors and other global bodies to launch a study exploring the impact of climate change scenarios on asset allocation.
AustralianSuper and VicSuper along with Mercer, the Carbon Trust and investor partners that include the Norwegian Agency Pension Scheme, the Ontario Municipal Employees Retirement System and the Maryland State Retirement and Pension System have activated the research assignement.
The initiative will identify potential new investment opportunities and possible future risks related to climate change over periods until 2030 and 2050.
AustralianSuper chief investment officer Mark Delaney said the exercise was an important opportunity to understand how different climate change scenarios will impact future investment returns.
"Whilst no one knows precisely how climate change will evolve, by considering the impact of a number of scenarios on our fund we will be better prepared for what eventuates," he said.
"Working with global pension funds and other large investors will promote valuable dialogue and exchanges of ideas."
The Grantham Research Institute on Climate Change and the Environment and Vivid Economics have been engaged to lead the research.
A report will be available in the fourth quarter of 2010. Each study partner will receive a tailored report assessing the effects of the scenarios on the asset mix.
Mercer's investment consulting business president Andrew Kirton said institutional investors will be better placed to consider the implications of climate change after the results are released.
"A scenario-based approach will provide new insight into current thinking among our project partners, many of whom are leading the charge in responding to the challenges presented by climate change," he said.
