Despite eighty-nine per cent of fund managers agreeing that climate change is an important investment issue, obstacles such as short-term analysis and lack of demand from pension funds and other clients prevents them from addressing it, says FairPensions.

FairPensions, which campaigns for major institutional investors to adopt Responsible Investment, conducted research over the summer of 2009 across 39 fund managers operating in the UK, and found that 83 per cent of respondents view the current low carbon price as a barrier to incorporating climate change issues into investment decisions.

Fifty-six per cent said lack of demand from clients to incorporate climate change-focused investments in portfolios was another such obstacle.

"Climate change and the regulatory efforts to reduce are now certain to have serious impacts on companies and their investors," commented Duncan Exley, director of campaigns at FairPensions. "Our research shows that there is good practice by some fund managers - and interest from enlightened asset owners such as those who endorsed this research - but fund managers' clients and their advisors need to be assertive about their interests and be aware that all fund managers are not the same."

The research also showed that only 41 per cent of respondents actually report on climate change risks and opportunities, and FairPensions believes that this is a prime argument for pension funds and other clients to request such information. This, they said, would ensure their interests are being promoted, and also shows that the government should consider making planned emissions reporting guidelines applicable to fund managers' portfolio emissions due to public interest in financial and environmental sustainability.

Reporting on greenhouse gas emissions (86 per cent), reduction of emissions (72 per cent), or being subject to stock exchange listing rules requiring disclosure of climate related risks (78 per cent) are examples of fund managers' desires for disclosure.

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