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Despite the political mandate of Article 2.1(c) of the Paris Agreement to align finance flows ‘with a pathway towards low greenhouse gas emissions and climate-resilient development,’ many investors do not manage physical and transitional climate risks.

Key Findings

1

After the pilot test, 40% of respondents implemented a climate strategy or integrated climate criteria into their investment process, showing the potential impact of climate assessments on portfolio strategy

2

There is a strong need to explore alternatives avenues for engaging with investors regarding climate risks

This paper seeks to evaluate the efficacy of informing investors about the alignment of their portfolios with the Paris Agreement. Based on survey feedback from a 2017 pilot study conducted with Swiss pension funds and insurance companies, the results suggest that after the pilot 40% of respondents implemented a climate strategy or integrated climate criteria into their investment process, showing the potential impact of climate assessments on portfolio strategy. This fact affirms both the positives of portfolio climate assessments, but also the need to explore alternatives avenues for engaging with investors regarding climate risks.