Planetary Pulse: Targeting effectiveness

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%).