More than a third (39 per cent) of asset managers are unable to provide an example of climate change-related engagement effort, research by Redington’s Manager Research Team has found.

Despite 76 per cent of responding asset managers saying they considered climate-related risk and opportunities, Redington found that just 60 per cent could provide an example of when these factors have influenced buying or selling decisions.

Furthermore, less than two-thirds (62 per cent) had an environmental, social and governance (ESG) engagement policy in place, while 28 per cent of respondents were currently reporting against the Task Force on Climate-related Disclosures (TCFD) guidelines.

However, improvement is expected, with half (50 per cent) of asset managers surveyed currently considering an adoption of the TCFD guidelines in their reporting procedures.

“Climate change is a widespread and global problem, impacting all sectors of the economy in one way or another,” said Redington head of manager research, Nick Samuels.

“We would expect all our managers, regardless of asset class, to have at least one, if not several, examples of climate change related engagements with their portfolio companies.

“Managers who thoroughly analyse – and take action on – risks are crucial to driving progress so, moving forward, we strongly hope to see this number increasing.”

Samuels called for a “fundamental shift” in conversations to push firms for increased transparency on their carbon footprint to allow for better quality carbon data and access to other “potentially relevant environmental metrics".

“While the positive momentum is clear, we simply have to raise the bar on climate change,” he added.

“Investors have the power to push for real action from policy makers and businesses to address a whole range of issues that fall under the banner of ESG.

“As an industry, we have a responsibility to ensure they have the tools and knowledge to properly address the climate related risks that arise in their portfolios.”

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