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Climate Guide to Asset Owners: Aligning investment portfolios with the Paris Agreement

The WWF’s Climate Guide to Asset Owners, aims to “support asset owners and show how they can align their investments with the objectives set in the Paris Climate Change Agreement”.


In this report, the WWF provides a large number of detailed recommendations for asset owners articulated around “key roles of asset owners: learning and seeking advicedeciding (their climate-related investment beliefs, targets, policy, processes and portfolio implementation); and monitoring service providers (investment managers, investment consultants, etc.) and engaging with key stakeholders”:

  • Assess the evidence of climate-related financial risks and opportunities: extensive research shows these to be significant and multi-faceted, across all asset classes and all time frames.”
  • Measure and publish both the climate risk exposure and the climate alignment of their portfolio, using a few available complementary tools enabling forward-looking climate scenario analysis at portfolio level.”
  • Anticipate regulatory obligations to assess climate-related financial risks and opportunities and climate alignment, given the rapidly evolving regulatory and policy context at global, European and national levels.”
  • “To prepare for this, implement the TCFD recommendations as from the 2018 reporting cycle: start by assessing and disclosing climate-related financial risks and opportunities, and continue by integrating those risks and opportunities in the investment policies and processes.”
  • Formulate climate-related investment beliefs which, in the light of the latest climate-related financial analysis […] recognise that portfolio alignment with the Paris Agreement will contribute to investing in the best interests of members and beneficiaries and therefore fulfil asset owners’ fiduciary duties.”
  • Make portfolio alignment with the Paris Agreement a Board priority – including explicit attribution of this responsibility within the Board -, and put governance structures in place that ensure proper support and implementation of the policy – including incentive schemes, commitment of resources, capacity building and involvement of members and beneficiaries.”
  • Adopt an investment policy that reflects and implements their climate-related investment beliefs – including investment targets, strategic asset allocation, engagement objectives, selection criteria and incentives for all service providers, and performance measurement and reporting.”
  • Include climate risks and opportunities in strategic asset allocation (SAA), including increasing exposure where feasible to alternative asset classes that are more likely to have a direct positive climate impact on the real economy (e.g. infrastructure: grids and renewable energy; real estate: highly energy efficient and resilient buildings; private equity: renewable and energy efficiency companies).”
  • Extend their investment policy to address sectors and technologies that pose particular climate-related risk or offer particular opportunities, and actively follow-up on the implementation of these policies, notably by increasing scrutiny on investment managers.”
  • Communicate and report annually on the implementation of the policy and adopt a proactive review process to incorporate new evidence of climate-related risks and opportunities.”
  • Work collectively, through investor coalitions, with other asset owners to learn, seek advice, share best practice and, most importantly, increase the impact of engagement activities with investment managers, portfolio companies and policy makers. Asset owners should, moreover, drive coalitions to promote the alignment of portfolios with the Paris Agreement.”