Climate risk, “stranded” assets and the responsibilities of asset owners
Held on Monday, December 12.
With support from Nabarro
You may be aware of the Asset Owners Disclosure Project, which was launched by Australia’s Climate Institute in 2008. It is run (out of London) by a former management consultant, Julian Poulter, but its chairman is John Hewson – a banker, businessman and economist whom many of you will remember as the leader of the Liberal Party (losing what was at the time described as the “unloseable election” to Paul Keating in 1993).
Like a number of other initiatives around the world (e.g. the Carbon Disclosure Project and, more recently, the Financial Stability Board’s Task Force), the AODP is focused on climate risk, and particularly on the vexed issue of “stranded” (high carbon) assets. Its aim is to convince asset owners (notably pension funds) about the dangers of investing in companies that remain highly exposed to climate risk through their reliance on carbon-based assets. What is unique is that, over the last five years, it has developed a sophisticated methodology for measuring corporate exposure – and for assessing corporates’ willingness to address the problem of carbon dependency.
The AODP’s main contribution is its annual Global Climate Index, which looks at the world’s 500 largest asset owners – and then rates them from AAA to D, with an “X” for those that are doing nothing to mitigate carbon risk. It believes that the database it has built up is unique and irreplaceable. The AODP has also set up a “Vote Your Pension” platform to promote understanding of how pension and mutual funds engage with exposed companies.
Until this year, the AODP has been generously funded by some of the major philanthropic foundations (including ClimateWorks and Oak). Now, the feeling of John and Julian is that the work should be folded into a larger organisation to maximise the impact it can have, and to make sure that the pressure on corporates to recognise the risks they are running is maintained.
They have, therefore, asked the CSFI to set up a small(ish) dinner at which they can talk about the work that the Project has done, and what remains to be advanced. They will be joined by Sharan Burrow – who, in addition to being a board member of the AODP (as I am), is the General Secretary of the International Trade Union Confederation in Brussels, and a former president of the Australian Council of Trade Unions.
This is a controversial area, and it is bound to provoke a lively discussion. To kick off that discussion, I am, therefore, delighted that Tom Burke and Lois Guthrie have agreed to join us:
- Tom is chairman of E3G (Third Generation Environmentalism) and chair of the Advisory Board of Earth Capital Partners. He is also a visiting professor at both Imperial and University Colleges, London, and sits on the Advisory Board of Glenmont. Until 2012, he was a senior advisor to the Foreign Secretary’s special representative on climate change.
- Lois is the founding director of the Climate Disclosure Standards Board, a consortium providing corporate environmental reporting standards and tools. Lois was previously technical director at Zurich Insurance Group, as well as technical director to the International Integrated Reporting Council (IIRC).
Would you like to join us? We only have around 20 seats, so an early response would be much appreciated - by calling the office on 020 7621 1056 or emailing email@example.com. Thanks to the generous hospitality of Nabarro, I can also promise excellent food and drink.