Risks don’t come much longer term than climate change, so you might expect sovereign wealth funds to be all over it, as investment giants with decades in their sights.
Yet the world’s biggest SWFs are making only patchy progress in adapting investment plans to account for environmental, social and governance factors, according to data on energy investments, an ESG analysis of the equity holdings of some of the funds, plus a survey of the players.
Such data provide snapshots into the complex and often opaque world of sovereign funds, which collectively hold nearly $8 trillion in assets.
The industry has invested $7.2 billion in renewable energy since 2015, for example, less than a third of the amount poured into oil and gas, data from the International Forum of Sovereign Wealth Funds (IFSWF) showed.
The Antipodean funds, which publicly disclose their investments, scored highly in the ESG analysis of major corporate holdings. New Zealand also said it planned to cut the emissions intensity of its overall portfolio by 40% by 2025, referring to a measure of emissions proportional to revenue.
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