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Climate Strategies & Metrics: Exploring Options for Institutional Investors

This report reviews the strategies and metrics available to investors seeking to measure and improve the climate friendliness of their portfolios, defined as the intent to reduce GHG emissions and aid the transition to a low-carbon economy through investment activities.

An investor strategy for climate friendliness encompasses a set of activities, an approach for positioning and signaling, and the metrics to support the strategy as summarized in Fig.0.1. This report first distinguishes climate friendliness from carbon risk (Chapter 1). It then explores how investors can increase their climate friendliness by asset class (Chapter 2) and achieve a climate impact, defined as GHG emissions reductions in the real economy through positioning and signaling (Chapter 3). Finally, the report assesses the landscape of available metrics and their suitability for each strategy (Chapter 4) and concludes with a summary and possible future developments (Chapter 5).