Planetary Pulse: Targeting effectiveness

Asset owners weigh risks and opportunities of investing for an inclusive energy transition.

Are asset owners moving from decarbonising their portfolios to reducing emissions?

Planetary Pulse reveals the findings from new primary research into real-world impact and transition finance. It is based on a survey of 300 senior professionals at asset owners and advisors around the world, including pension funds, insurers, endowments, foundations, central banks, sovereign wealth funds and consultants.

Planetary Pulse visualised

Planetary Pulse Data Viz
2023 regional highlights

Asia Pacific highlights

The deployment of climate-related practices appears somewhat stronger in Asia-Pacific than in other regions, with climate-factor integration (54%, up from 40% in 2022) and portfolio construction (42%, down from 45% in 2022) the most commonly implemented practices; 58% have at least one-quarter of their AUM invested in portfolios with climate-related instructions or objectives.

APAC-based respondents cite climate risk (assessed using metrics such as Value-At-Risk) as the most used climate-related target (54% vs 43% globally). While a plurality sets targets at asset-class level (42%), respondents in APAC are the most likely across regions to be planning to set targets at individual fund level over the next 12 months (54%). As with US-based respondents, their preferred framework is SBTi (56%).

Climate-related factor integration, the most used investment tool, also scores highly on contribution to portfolio decarbonisation (54%) but it scores on the low side for its contribution to real-world emissions (38%). However, the most surprising disconnect relates to the adoption of climate-related themes: used by only 21%, this practice is nonetheless viewed by 80% as contributing strongly to real-world emissions reduction, by far the highest score for any practice across all regions.

APAC-based respondents are most likely to have current investments in transition finance (46%). While they are slightly less likely to view emerging-market transition finance as a major commercial opportunity for asset owners (44% vs 51% across regions), they are the most likely to agree that, without greater investment in emerging-market transition finance assets, organisations and governments globally will not be able to meet the Paris Agreement climate-change goals (50%).

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FT Longitude research paid for by Ninety One.

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