On the go: Three of the world’s most prominent pension fund investors have released a joint statement on sustainability, hitting out at short-termism and scepticism that could allow climate change alone to destroy $69tn (£53tn) in global economic wealth.
The £68bn Universities Superannuation Scheme, the $388.7bn California Public Employees Retirement System, and the ¥159.6tn (£1.16tn) Government Pension Investment Fund each published a letter on their website on Wednesday, stressing their duty as asset owners to provide “the post-retirement financial security of millions of families across multiple generations”.
They outlined their commitment to sustainable business practices, pointing to Moody’s Analytics findings that climate change alone could destroy $69tn of value for investors by 2100.
The three asset owners also delivered an ultimatum to both short-term corporate boards and asset managers, saying that these practices are putting their long-term growth at risk and “are not attractive partners for us”.
While companies are increasingly reporting in line with frameworks such as the Task Force on Climate-related Financial Disclosures and the Sustainability Accounting Standards Board, the letter said there is a long way to go before disclosures that help investors assess long-term risks become universal.
“We appreciate that many multinational firms often find themselves under excessive pressure from the market to deliver on short-term goals, making it difficult to protect their long-term corporate vision. As asset owners, however, we strive to act as stewards of long-term capital, creating sustainable value by supporting companies with a clearly defined, long-term vision for growth,” the letter stated.
The pension funds also hit out at sceptics of the merits of environmental, social and governance investing, pointing to meta-analysis of ESG studies demonstrating that around 90 per cent show no negative impact or better.
“Companies and asset managers who commit to sustainable value creation are not injecting politics into business, nor are they ‘virtue-signalling’. They are fulfilling their duty to us and, by extension, to the millions of families depending on us,” the funds stated.
