Commentaries
Now raising intellectual capital
Are pension funds ignoring climate risk?
And are conservation groups moving into the business of giving investment advice?
It seems an unlikely path for environmentalists to take, but this WWF commissioned report warning that failure to take carbon risk into account could knock pension fund returns raises some interesting points.
“Carbon Risks in UK Equity Funds” by Mercer and Trucost ”outlines how fund manager complacency on corporate carbon performance could put pension fund assets at risk as carbon-intensive companies face rising carbon costs and their company valuations fall in the short-term in anticipation of future carbon risk”.
The report argues that fund managers “could dramatically reduce the carbon footprints of their funds through stock selection without the need to alter sector weightings or their overall investment strategy”.
Putting investors first
While the Obama administration’s financial overhaul plan falls short on a lot of big issues, it does get some of the smaller things right. One smart move by team Obama is a call for brokers to put clients first when making financial decisions.
The Wall Street Journal did a good job today in noting that one proposal buried in the Obama’s 88-page plan would change the legal standard of accountabilty for brokers. Right now, brokers are only required to put clients into investments that are “suitable” for them–a pretty squishy standard. But Team Obama would like to change this and require brokers to have a fidcuiary duty to their clients.
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The Wall
