Investment climate changes
GETTING companies and superannuation funds to reveal their performance on key environmental metrics such as fossil fuel reserves or carbon dioxide emissions can be an uphill battle.
The Asset Owners Disclosure Project last month released what it claimed to be the first global investment index showing how investors were managing climate change risks. The index relied heavily on public information for the 300-plus investors assessed, with just 17 investors responding directly.
Enter Bloomberg, the global financial news and data giant owned by New York mayor Michael Bloomberg. The company is stepping up the integration of environmental, social and governance (ESG) information it provides to more than 315,000 subscribers around the world.
Mr Bloomberg's calls for greater US urgency to tackle climate change in the wake of hurricane Sandy's destruction in October were hardly his first foray into this field. The 10th-richest American (and world's 20th, according to Forbes) donated $US50 million in 2011 to help force the closure of a third of US coal-fired power plants by 2020.
As a company, Bloomberg has assembled ESG data on more than a quarter of the 20,000 companies that comprise the "general investable universe", said Curtis Ravenel, global head of the company's sustainability group. About half the ASX 100 companies made the list, he said.
"Given our position in the market, we can probably accelerate disclosure more than most," Mr Ravenel said in a recent interview.
While the drive is "a bit mission-oriented", Mr Ravenel said investment interest was also growing: "There are investors, hedge funds and the like who really think that when you integrate ESG information, there's alpha opportunity.
"Some people think it's a good tool for managing a company's risk. Some think it's a proxy for good management overall."
Local Government Super is one Australian fund to back the greater use of ESG measures. Its own investment stance earned it one of just two "triple A" ratings granted globally by the Asset Owners Disclosure Project.
"Certainly the sustainable overlay has added to our performance," said Peter Lambert, chief executive of the fund. To the end of November, its Sustainable Australian Shares fund had returned about 11 per cent since inception last February, Mr Lambert said. That compared with 8.7 per cent for the benchmark S&P/ASX 200 over the same period.