Mixed Greens: Climate seen as major threat by fund managers

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Survey of fund managers finds majority wary of climate risk; Swiss lift carbon tax; NSW LED lighting plan; PacHydro wind noise fix.

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An international survey of fund managers with collective assets worth more than $14 trillion found 53 per cent had divested or not invested in certain listed equities due to unacceptable climate change risks. The survey – which was commissioned by the Global Investor Coalition on Climate Change, and conducted by Mercer – details the results of the third global survey of the investment of 37 asset owners and 47 asset managers, which were published Tuesday by the European Institutional Investors Group on Climate Change, the North American Investor Network on Climate Risk, the Australia/New Zealand Investor Group on Climate Change and the Asia Investor Group on Climate Change.

According to the report, just under 70 per cent of asset owners said climate change factors influenced their fund manager decisions in 2012, up from 43 per cent who declared the same last year. Furthermore, 70 per cent of asset owners and 60 per cent of asset managers reported they had made low-carbon investments. The number of asset owners monitoring how their managers integrate climate change into their investment processes also rose from 53 per cent to 63 per cent in 2012, while the report notes a majority have now conducted formal or informal climate risk assessments on their investment portfolios.

Nathan Fabian, CEO of the Australia & New Zealand-based Investor Group on Climate Change, says the results highlight the growing importance of bringing investment practice and climate policy into alignment. “We are now at a stage where investment practice and climate policy will need to move together to address climate change risk,” Fabian said. “Policy will improve, but policy certainty will remain elusive. That is why aligning investment practice with the underlying risks of climate change is so important. It is also why understanding progress in investment practice is so important and why participants in this survey are to be commended for doing so.”

In other news…

Switzerland is set to increase its carbon tax from 36 francs to 60 francs per tonne of CO2 (equivalent to $US36 and $US61) in 2014. The move to almost double its price on carbon pollution was announced by the Swiss government last month, after the country missed its emissions reduction target of 8 per cent below 1990 levels at the end of 2012 by a few percentage points.

A plan to install energy efficient street lights in some of the most populated parts of New South Wales is expected to save local governments millions of dollars a year. ABC Radio’s The World Today reports that Ausgrid, the state’s electricity distributor, has completed an 18 month trial of LED street lights and found they reduced electricity use by up to 70 per cent. Ausgrid energy efficiency specialist Paul Myors told ABC that the LED lights, rolled out across the network of 250,000 lights, could also lead to greenhouse emissions reductions of potentially thousands of tonnes per year.

Pacific Hydro has identified and fixed a high-frequency noise at its Cape Bridgewater wind farm, which had eluded technicians since September 2012. PacHydro said the cause of the noise, which was emitted during low wind conditions, was difficult to pinpoint at a site characterised by winds that “force trees to grow at an angle.”  The noise – described as a screech or squeal – was audible at up to an estimated 500m from some turbines during low wind conditions. Pacific Hydro general manager, Lane Crockett, has travelled to Cape Bridgewater to apologise in person to those neighbours who were “clearly distressed” by the noise, and pledged to work more collaboratively with them in the future.


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