GLOBAL CLIMATE INDEX 2017 RATING THE WORLD’S INVESTORS ON CLIMATE RELATED FINANCIAL RISK

EMBARGOED 26 APRIL 2017 LEADER LAGGARD

PREFACE

The fifth AODP Global Climate 500 Index launches The Task Force on Climate-related Financial after a year of rapid developments in articulating the Disclosures (TCFD) delivered its recommendations financial risks of climate change to the global economy. to the Financial Stability Board in December. The Paris Agreement entered into force in November, This comprehensive guide for all sectors of the and at time of writing has been ratified by 141 countries economy is due to be considered by the G20 in representing over 82% of global emissions. The speed July and will likely see big changes in the way both of ratification demonstrates how seriously nations companies and investors report this information. are committed to decarbonising their economies and Despite early signs of a rollback on climate policy keeping climate change below 2oC. in the US, long-term climate risk management The world’s first law on mandatory climate disclosure cannot be unlearned by the investment community, for institutional investors took effect in France, setting where the majority have now begun to take action. a model for other countries. Consideration of the financial implications of climate change is on an upward long term trajectory, transcending short-term political cycles. ABOUT AODP

The Asset Owners Disclosure Project (AODP) is an Asset owners and managers are scored on three independent global not-for-profit organisation that key capabilities which align with the four key areas recognises the specific financial risk attributes of highlighted by the FSB Task Force on Climate-related climate change. AODP has developed the world’s Financial Disclosures: Governance & Strategy, Portfolio leading reporting framework for institutional investors Carbon Risk Management and Metrics & Targets. encompassing the disclosure and management of They are graded from AAA to D while those with no climate risk. evidence of action are rated X. Climate risk is of course only one risk that investors While the underlying questions remain the same as last have to analyse. We acknowledge this. However, as a year, we have calibrated our assessment categories multi-sector, multi-asset class and non-diversifiable with the FSB’s recommendations to help asset owners risk, we believe it requires special attention. and asset managers prepare for potential future reporting requirements. This alignment provides The AODP Global Climate 500 Index rates the world’s institutional investors with reporting consistency, 500 biggest asset owners – funds, insurers, trend analysis and an effective framework to implement sovereign wealth funds, foundations and endowments – the strategies required to meet, and perhaps more on their success at managing climate risk within their importantly exceed the FSB’s expected guidelines. portfolios, based on direct disclosures and publicly Further insight on our methodology can be found in available information. the Appendix to this report and on our website. This year also sees the launch of the first AODP Global To help readers understand how investors are developing in Climate Index for Asset Managers, rating the world’s their approach to climate change risks and opportunities, 50 largest asset managers on their success at we have designated the following categories based on managing the financial risks of climate change for rating. The proportion of Index participants falling into their clients. It follows the same methodology. each category this year is as shown below. CONTENTS

EXECUTIVE SUMMARY 03 Category Rating Band Asset Owners Asset Managers ASSET OWNER LEADERS 11 Leaders A-AAA Top 7% Top 4% ASSET OWNER LAGGARDS 15 ASSET MANAGERS 17 Challengers B-BBB 7% - 14% 4% - 20%

REGIONS 21 Learners C-CCC 14% - 22% 20% - 46% COUNTRIES 23 CAPABILITIES 31 Bystanders D 22% - 60% 46% - 94% Bottom 40% Bottom 6% APPENDIX 55 Laggards X Zero score Zero score

Further information on the methodology can be found in the appendix.

02 EXECUTIVE SUMMARY FIGURE 01 / AODP GLOBAL CLIMATE INDEX SECTOR PERFORMANCE

THE SCALES HAVE TIPPED - AVERAGE PERFORMANCE % A 60% MAJORITY OF ASSET 18% 16%

OWNERS ARE NOW TAKING 50 Asset Managers $43,437 ACTION VERSUS 40% IGNORING 14% THE RISKS AND OPPORTUNITIES 12% OF CLIMATE CHANGE. 10%

8% 307 Pension Funds $15,363 21 Others* Climate risk rose further up the investor agenda in $572 2016. The Paris Climate Agreement came into force 6% 32 SWFs in November, including a recognition that financial $5,987 flows must be aligned with the commitment to keep climate change well below 2oC. Regulatory change is on the agenda, with France implementing a world- 4% 137 Insurers first mandatory climate risk disclosure requirement $17,802 for institutional investors and the Task Force on Climate-related Financial Disclosures delivering its recommendations to the Financial Stability Board, 2% for consideration by the G20 in July this year.

0% 0 50 100 150 200 250 300 350 400

NUMBER OF INVESTORS IN GLOBAL CLIMATE 500 INDEX

* Other s include: Foundations, = Total USD Billion AUM Endowments and Mutual Funds

04 EXECUTIVE SUMMARY / ASSET OWNERS FIGURE 02 / NUMBER OF ASSET OWNERS BY RATING GROUPS

KEY DEVELOPMENTS

The 2017 Global Climate 500 Index covers the Top 500 asset owners globally with $40 trillion AUM. 246 Upping the ante: 201 187 ▬▬ 201 X-rated Laggards, a 18% fall in those ignoring climate risk, a clear minority. 157 ▬▬ 17 AAA rated Leaders up from 12 last year, the largest AAA gain in AODP Index history. 44 34 34 41 ▬▬ Challenger group rated B-BBB sees the most significant increase, 31 25 up 36% to 34, again a record. Learners Bystanders Laggards ▬▬ 112 rated C and above, a 16% rise in those taking tangible action. Leaders Challengers ▬▬ 187 rated D, a 19% rise in those taking first steps acknowledging NUMBER OF ASSET OWNERS 2017 2016 climate-related financial risk.

AODP’s fifth Global Climate 500 Index reveals how The number of Laggards has dropped by 19% and The world’s two biggest economies, the US and China, In the US, President Trump’s first 100 days have seen the world’s biggest asset owners are responding now accounts for just 40% of the index, with $12.4 are among the worst performers, although the US plans to reverse much action on tackling climate to these signals. For the first time ever, we see trillion in AUM. Insurers like Mitsui Mutual and is highly polarised with some important Leaders. change. However, with strong opposition from a significant majority of asset owners scaling up National Mutual in Japan and pension funds like In China, Laggards make up 67% of asset owners influential states such as California and New York, action to protect their portfolios from climate Thrift Savings Plan in the US are putting the financial with investments worth $2.6 trillion – over 80% of it remains to be seen what effect federal action will risk, 299 institutions with funds worth $27 trillion future of customers at risk by failing to acknowledge AUM. While China has championed green finance have on companies and investors. Leading investors representing 60% of asset owners and 70% of the risks and opportunities afforded by the low at the G20 and has ambitious targets to boost made a conscious decision years ago that lack of Index AUM. Major institutions are leading the way: carbon transition. renewables, a lack of transparency prevents us policy or policy reversal was in itself a risk to be TIAA, the $915 billion US pension/asset manager identifying increased low-carbon investment by managed and only increased their need to grow the Nearly one in five asset owners now has staff focused hybrid, and , the $601 billion global insurance its institutions. size of their clean asset base as a hedge against a on integrating climate risk into their investments, giant, have both joined the Leaders group now climate acceleration scenario. a 33% increase from last year. Two in five (42%) In the US 63% of asset owners with $4.5 trillion of numbering 34 global institutions. now incorporate climate change into their policy investments are ignoring climate change. The US Asset owners in the US control $10.3 trillion, From Bystanders to Leaders, numbers have frameworks, almost twice as many as last year. leads in low carbon investment in absolute terms: a quarter of the Index. If more follow the lead set increased in every category as institutions improve, 13% of asset owners now calculate portfolio carbon green investments disclosed by asset owners by peers in Europe, Australia and New Zealand and with the biggest rise in the Challenger group emissions, up from 10%, however assessing the risk doubled to $55bn, surging past the $47bn of the embrace climate-aware investing, they can radically rated B-BBB, which has rapidly improved risk of stranded assets is still quite an advanced tool used , last year’s top performer, yet this only advance the global transition to a low-carbon economy. management – a general theme this year. by only 6% of the Index, mostly in the Leaders group. represents 0.5% of total US AUM, compared to the 3.1% average of Dutch investors. Across the Index Oceania and Europe are the most progressive low carbon investment has improved 68% to $203 regions, providing the ten best performing countries. billion yet still only represents 0.5% of index AUM. In eight of these – Australia, New Zealand, the Netherlands, Ireland and all of Scandinavia – every fund is taking some action on climate risk.

06 EXECUTIVE SUMMARY / ASSET MANAGERS FIGURE 03 / NUMBER OF ASSET MANAGERS BY RATING GROUP

HIGHLIGHTS

The new 2017 Global Climate Index for Asset Managers covers the top 50 asset managers globally 24 with $43 trillion AUM. ▬▬ Two Leaders rated A or above, both European. ▬▬ Only three X rated Laggards – just 6% of the Index – far greater recognition of climate risk than asset owners. 13 ▬▬ Challengers, rated BBB-B, account for 16% of the Index. 8

▬▬ 46% are taking tangible action 3 on climate-related investment risks and opportunities, rated C 2 or above. Leaders Challengers Learners Bystanders Laggards ▬▬ 24 rated D, just under half the Index (48%), are taking first steps to acknowledge climate related financial risk. NUMBER OF ASSET MANAGERS 2017

AODP’s first ever Global Climate Index for Asset The asset management sector is highly concentrated. Asia Pacific’s top performer, Australia’s Macquarie Nearly half of Managers shows the world’s top 50 asset managers The top 50 firms manage $43 trillion, over 70% Bank, only rates a D, a surprising contrast with the are well ahead of their asset owner clients in their of global , and are average B scored by its asset owners. This is a cause approach to managing the financial impact of concentrated in just 10 countries with US firms for concern given its impending acquisition of the Asset Managers climate change on investment portfolios. dominating. UK’s Green Investment Bank. Nearly half of rated asset managers are taking Europe is way ahead. It accounts for the top six There’s fast pace of change being seen in the market. are taking tangible tangible action to manage the risks and opportunities countries and the ten highest rated asset managers. Research was completed in early 2017, so any recent posed by climate change, compared to just 23% of The Netherlands is the leading country with its changes will not be incorporated – updates have action to manage asset owners. An even starker comparison is the $441bn APG Asset Management the only institution already been noted in policy and disclosure for a few proportion of Laggards – only 6% fail to disclose to earn a AAA rating. The $1,140bn Legal & General participants, more are sure to follow throughout 2017. action compared with 40% of asset owners. comes second, rated AA, the risks and However, asset owners are ahead in leading the one of five UK asset managers in the top 10. way on climate risk, with 7% in the Leaders group The US accounts for 27 of the 50 asset managers versus 4% of asset managers. opportunities posed and 70% of funds under management ($30 trillion). Interestingly, manager subsidiaries of asset owners However, it is way behind on tackling climate risk. by climate change. are the most progressive, accounting for nine of the Its best performers are the $1,252bn Goldman top ten in the Index, in some cases surpassing their Sachs Asset Management and $4,645bn Blackrock, parent in the ratings. two of six C-rated funds. Another 18, rated D, are only taking the first steps, including $3,500bn Vanguard. It accounts for the only three X-rated institutions taking no action, including $2,060bn .

08 EXECUTIVE SUMMARY / ASSET MANAGERS CLIMATE CHANGE IS NOW A MAINSTREAM CONCERN THROUGH THE INVESTMENT COMMUNITY, AND ACTIVITY IS GATHERING UNSTOPPABLE MOMENTUM.

CONCLUSIONS

Climate change is now a mainstream concern Asset owners and managers that have acted to throughout the investment community, and activity is reduce their exposure to climate risk and increase gathering unstoppable momentum. A 60% majority their investment in the low carbon economy are of asset owners recognise the financial risks – already seeing this hedging/opportunity strategy and opportunities – of climate change, and are paying off. taking action, with growing numbers scaling up their Pressure will now mount on those resistant asset activities to achieve A, B and C ratings. owners and managers still failing to take and Asset managers are well placed to meet their growing disclose action on climate change. When leading demands. All but three of the top 50 are taking some funds around the world are disclosing significant action, and as a whole they are performing better than action, it becomes harder to defend doing nothing. asset owners. As the number of Laggard funds dwindles, their exposure to any market repricing grows As investors prepare for the implementation of significantly higher and a time may be approaching disclosure guidelines, the building blocks appear to where it will be too late to avoid portfolio losses. be in place in the majority of institutions. There is indication of even more advancement to come this year, with many institutions either already underway or preparing to embark on more ambitious actions. ASSET OWNER LEADERS TABLE 01 / 2017 AODP GLOBAL CLIMATE 500 LEADERS LEAGUE

2017 2017 2017/2016 ASSET OWNER NAME TYPE COUNTRY RATING RANK CHANGE AAA 1 1 Local Government Super (LGS) Australia MAJOR ASSET OWNERS ARE AAA 2 1 The Environment Agency Pension Fund (EAPF) Pension fund UK AAA 3 2 New York State Common Retirement Fund (NYSCRF) Pension fund USA

AAA 3 9 First State Super Pension fund Australia INCREASINGLY LEADING THE AAA 5 1 Stichting Pensioenfonds ABP (ABP) Pension fund Netherlands AAA 6 12 Pensioenfonds Zorg en Welzijn (PFZW) Pension fund Netherlands

AAA 7 12 Kommunal Landspensjonskasse Gjensidige WAY ON CLIMATE RISK. Forsikringsselskap (KLP) Pension fund Norway AAA 8 5 Fjärde AP-Fonden (AP4) Pension fund Sweden

AAA 9 214 Ilmarinen Mutual Pension Insurance Company Pension fund Finland

AAA 10 69 Elo Mutual Pension Insurance Company Pension fund Finland

AAA 11 5 Sovereign Fonds de Réserve pour les Retraites (FRR) wealth fund France AAA 12 2 Church Commissioners for England Endowment UK

AAA 13 7 Pensionskassernes Administration (PKA) Pension fund Denmark

AAA 14 4 Etablissement de retraite additionnelle de la Fonction Publique (ERAFP) Pension fund France AAA 15 94 Sovereign New Zealand Superannuation Fund wealth fund New Zealand AAA 16 16 Sjunde AP-Fonden (AP7) Pension fund Sweden

AAA 17 3 United Nations Joint Staff Pension Fund (UNJSPF) Pension fund USA

AA 18 11 AustralianSuper Pension fund Australia ▬▬ The Leaders – rated A and above – Major asset owners are increasingly leading the way have increased 10% to 34. on climate risk. Two giants join the Leader group: AA- AA 19 4 Wespath Investment Management (Wespath) Pension fund USA rated AXA, the $601 billion French insurer and A-rated ▬▬ AAA rated asset owners have US based pension fund and asset manager TIAA AA 19 - Vision Pooled Superannuation Trust (VPST) Pension fund Australia increased by 42% to 17. ($915bn). Both funds have risen from a BBB rating as AA 21 7 Bedrijfspensioenfonds voor de Landbouw (BPL) Pension fund Netherlands a result of significant improvements in portfolio risk ▬▬ USA tops total number in the management, which is a general theme this year. AA 22 9 Unilever Pension Funds Pension fund Netherlands AA 23 17 Insurance Leaders group with 7, but this Other large Leaders maintaining their AAA rating AXA Group company France represents only 4% of US asset include the $410bn Dutch pension fund ABP and AA 24 11 Caisse des Dépôts (CDC) Sovereign France owners in the Index. the $179bn New York Common Retirement fund. wealth fund Joining them is major Dutch fund, PFZW ($208bn) AA 25 17 Andra AP-Fonden (AP2) Pension fund Sweden ▬ Sweden tops on proportional ▬ up from a AA rating last year, along with our star AA 26 4 Aviva Insurance Insurance UK representation with 40% of their mover Ilmarinen Mutual Pension Insurance Company, company funds in the Leaders category. which has leapt from a D rating last year. The $302bn AA 27 19 Tredje AP-Fonden (AP3) Pension fund Sweden California Public Employees Retirement System, AA 28 19 California Public Employees Retirement System Pension fund USA Australia’s $7bn Local Government Super reclaims AustralianSuper ($78bn) and Sweden’s AP2 ($38bn) (CalPERS) the top ranking from the UK’s $4bn Environment AA 29 4 California State Teachers' Retirement System all slip from AAA to AA this year. Notable funds (CalSTRS) Pension fund USA Agency Pension Fund, which reverts to second place joining the AA group are UK insurer Aviva ($422bn), A 30 1 The Church of England Board (CEPB) Pension fund UK in this year’s Global Climate 500 Index for Asset California State Teachers Retirement System ($193bn), Owners. These two funds are world leaders in all and Unilever Pension Funds ($26bn) – the only corporate A 31 7 BT Financial Group Pension fund Australia three capabilities of governance and strategy, pension fund among the prestigious Leaders – A 32 15 University of California Retirement System (UC risk management, and disclosure of metrics on all improving from an A rating last year. Regents) Endowment USA portfolio carbon and investment in the low carbon A 33 9 TIAA Global Asset Management (TGAM) Pension fund USA economy, demonstrating even smaller funds can excel at considering the risks and opportunities A 34 13 Victorian Superannuation Fund (VicSuper) Pension fund Australia presented by the transition to a low carbon economy. 12 ASSET OWNER LEADERS JOINING THE LEADERSHIP RANKS

AAA-A AODP GLOBAL CLIMATE INDEX 2017

This year has seen eight new entrants to the These funds may have had a climate strategy Leaders group, proving it possible for committed previously, but are only now disclosing their companies to make great progress in a single year. actions. Greater transparency is likely to build momentum to a low-carbon economy by As mentioned above, Finland’s Ilmarinen has revealing to Laggards the true level of climate climbed 214 places up the ranking, gaining a AAA action among their peers. rating and a top 10 ranking for their new policies, improved transparency and leading action Global insurer Axa ($601bn) and Sweden’s $36bn on managing the financial risks of climate AP3 have both made headway in portfolio risk change within their investment portfolio. management to achieve a AA rating, alongside Finnish compatriots Elo also gain a top 10 an impressive debut performance by Index AAA rating for improving across the board, newcomer $6bn Vision Pooled Superannuation rising from a CC rating last year. New Zealand Trust of Australia. TIAA progress to an A rating Superannuation Fund (rated D in 2016) and from last year’s BBB. Sweden’s AP7 also joined the AAA elite with significant improvements in risk management. ASSET OWNER LAGGARDS TABLE 02 / 2016 AODP GLOBAL CLIMATE 500 LARGEST LAGGARDS [BY AUM]

ASSET OWNER NAME COUNTRY TYPE AUM USD BILLION

LARGEST LAGGARDS China Investment Corporation China Sovereign wealth fund $814

SAMA Foreign Holdings Saudi Arabia Sovereign wealth fund $654 [BY AUM] (Saudi Arabian Monetary Agency) Kuwait Investment Authority Kuwait Sovereign wealth fund $592

SAFE Investment Company China Sovereign wealth fund $568

Mitsui Mutual Life Insurance Japan Insurance company $493

Zenkyoren Japan Insurance company $477

Thrift Savings Plan (TSP) USA Pension fund $458

China Life Insurance (Group) Company China Insurance company $445 X Hong Kong Monetary Authority China Sovereign wealth fund $406 Qatar Investment Authority Qatar Sovereign wealth fund $304

Total $5,212

TOTAL X RATED $12,508

▬▬ 201 X rated funds, managing ▬▬ The 10 largest Laggards manage Nearly a third of total Index value – $12.4 trillion – These moves are a result of improved disclosure $12 trillion, a 19% fall and $5 trillion in assets: 13% of the is managed by X-rated funds – Laggards who appear and investment in low carbon and environmentally to be ignoring climate risk. Ten funds account for sustainable assets. significant improvement from 2016. total Index. $5.2 trillion of this sum, predominantly sovereign wealth Success stories are Danica Pension, moving from funds from the Middle East and large Chinese and Laggard to a BB-rated Challenger, driven by ▬▬ Laggards now represent just ▬▬ High proportion of oil-state Japanese insurers. The $814 billion China Investment improvements in governance, policy and climate Corporation is the largest Laggard completely 40% of the Index. sovereign wealth funds and risk mitigation actions. The UK’s Cooperative ignoring climate in its investments. Asian insurers. Pension Scheme and Australia’s IOOF move into It is encouraging to see that three of last year’s top the Learner ranks at CC and C respectively for 10 are now taking action and have earned a D rating: similar actions. Another 43 funds advanced to a the $792bn Abu Dhabi Investment Authority, D rating, with the majority of improvements in policy, $795bn Japan Post Insurance and the $611bn voting transparency and becoming a PRI signatory. Japanese insurer Nippon Life Insurance Company.

16 ASSET MANAGER LEADERS ASSET MANAGER LAGGARDS

2017 LEADERS 2017 LAGGARDS

2 4% 3 6% Asset manager Leaders, Only 4% of asset managers rate as X-rated Laggards, all US-based. Only 6% of asset managers are both from Europe. Leaders versus 7% of asset owners. Laggards vs 40% of asset owners.

Two asset managers make the Leaders group: Legal & General Investment Management also Only three firms accounting for just 7% of total As a privately owned company, there is very little AAA-rated Dutch APG Asset Management performs well across all capabilities – ranking index assets under management – a mere disclosure and a general lack of transparency and AA-rated Legal & General Investment second in both Governance & Strategy and Risk $3.2 trillion – are X-rated Laggards with no regarding its policies and actions as an investor. Management, with $441bn and $1,140bn under Management, and third in Targets & Metrics, evidence of action on climate risk. This is far better This may reflect Fidelity’s market – nearly two management respectively. outperforming its parent organisation, than the 40% of asset owners in this category and thirds of US asset owners are Laggards, and with which rates D in the Asset Owner Index. a welcome sign that the day-to-day management 94% of its funds under management sourced APG excels in all three categories – ranking of their investments is being undertaken by from this market there may be little pressure number 1 in Governance & Strategy, Portfolio This highlights an issue across the industry: a lack an industry seriously considering the financial from institutional clients for a more progressive Climate Risk Management and Targets & Metrics. of transparency on policy and action at a corporate implications of climate change. ESG approach. It is a subsidiary of Dutch pension fund ABP, level, even where climate is acknowledged as a a longstanding Leader on the Asset Owner Index, key issue to manage by a subsidiary. All three Laggard managers are US- based. The other two X-Rated funds are: the $611bn rated AAA, and is one of a number of high- Fidelity Investments, one of the largest global Affiliated Managers Group (AMG), a partnership Asset managers lag behind asset owners on performing managers owned by asset owners. investment managers with $2,060bn AUM makes of a number of boutique investment managers; climate leadership. APG and L&GIM account for Its clients include a number of pension funds in no mention of climate change, responsible and the $528bn New York Life Investment 4% of the Index and 3.7% of Index AUM, whereas addition to ABP. investment or ESG in any of its publicly available Management, the asset management subsidiary the asset owner Leaders account for 7% of the information. of New York Life which also rates as a Laggard Index and 10.5% of Index AUM. on our asset owners index. Very little information is available for either manager. 18 ASSET MANAGER LEADERS TABLE 03 / AODP GLOBAL CLIMATE INDEX FOR ASSET MANAGERS

2017 2017 ASSET MANAGER NAME COUNTRY 2017 2017 ASSET MANAGER NAME COUNTRY RATING RANK RATING RANK AAA 1 APG Asset Management Netherlands D 26 Columbia Threadneedle Investments USA

AA 2 Legal & General Investment Management UK D 27 Generali Investments Europe Italy

BBB 3 Aviva Investors UK D 28 RBC Global Asset Management Canada

BBB 4 M&G Investments UK D 29 Asset Management USA

BBB 5 Investment Management UK D 30 Franklin Templeton Investments USA

BB 6 Global Investors Germany D 31 UK

BB 7 Natixis Global Asset Management France D 32 MFS Investment Management USA

BB 8 AXA Investment Managers France D 33 Macquarie Australia

B 9 Deutsche Asset Management Germany D 34 Sumitomo Mitsui Trust Group Japan

B 10 HSBC Global Asset Management UK D 35 BNY Mellon Invest Management, EMEA USA

CCC 11 UBS Global Asset Management Switzerland D 36 Mellon Capital Management USA

CC 12 Aegon Asset Management Netherlands D 37 T. Rowe Price USA

CC 13 Standard Life Investments UK D 38 Wellington Management USA

CC 14 BNP Paribas Investment Partners France D 39 Vanguard USA

C 15 Goldman Sachs Asset management USA D 39 USA

C 16 BlackRock Inc USA D 39 Legg Mason USA

C 17 Aberdeen Asset Management UK D 42 Principal Global Investors USA

C 18 J.P. Morgan Asset Management USA D 43 Wells Capital Management USA

C 18 Morgan Stanley USA D 44 Federated Investors USA

C 20 France D 45 PGIM (formerly Pramerica Investment Management) USA

C 21 PIMCO USA D 46 Capital Group USA

C 22 Switzerland D 46 Nomura Asset Management Japan

C 23 AllianceBernstein USA X 48 Fidelity Investments USA

D 24 Dimensional Fund Advisors USA X 48 Affiliated Managers Group USA

D 25 State Street Global Advisors USA X 48 New York Life Investment Management USA

20 REGIONS FIGURE 04 / REGIONAL ASSET MANAGER LEADER/LAGGARD PERFORMANCE PROPORTION OF LAGGARDS

0% Asia Pacific EMEA 2% 4% 6% REGIONAL PERFORMANCE 8% 10% Americas 12% 14% 0% 2% 4% 6% 8% 10% 12% 14%

PROPORTION OF LEADERS = T otal Region AUM

TABLE 04 / REGIONAL LEADERS – ASSET OWNERS TABLE 05 / REGIONAL LEADERS – ASSET MANAGERS

2017 2016 2017

RATING RANK REGION # ASSET OWNERS AUM # ASSET OWNERS AUM CHANGE IN RATING RANK REGION # ASSET MANAGERS AUM USD BILLION USD BILLION AVE SCORE USD BILLION

CC 1 EMEA 190 $15,334 190 $15,426 54% B 1 EMEA 19 $11,256

C 2 Asia Pacific 84 $12,136 90 $10,880 27% D 2 Asia Pacific 28 $30,823

D 4 Americas 226 $12,254 220 $11,432 32% D 3 Americas 3 $1,358

Total 500 $39,725 500 $37,737 Total 50 $43,437

▬▬ Europe is the clear leader Europe leads the world on climate risk. Scandinavian Asia Pacific sees a variety of performance. Asset owners European countries on climate risk among asset asset owners continue to dominate the Leaders group in Australia and New Zealand average B compared and are setting the bar high for disclosure and action with an average D across Asia. However, all three asset managers and asset owners. on climate risk. The average rating rose from to CC managers based in this region rate D. Macquarie, remain well ahead of from C last year (with African and Middle Eastern asset the sole Australian investment manager included in ▬▬ The Americas performs worst, owners remaining at D). Although average scores are this index, will have to dramatically improve its climate the curve in climate with asset owners and managers rising strongly around the world, EMEA saw by far the credentials, with the impending acquisition of the UK’s averaging D in all sub-regions. fastest improvement with a 54% rise. Green Investment Bank, which has just been given the green light by UK courts1. risk disclosure. Europe’s 19 asset managers mirror the success of ▬▬ Asia Pacific asset owners perform their asset owner clients, with an average B rating. Across all parts of the Americas asset managers better than asset managers, The entire top 10 asset managers are based in the and owners average D. Most worryingly, the 27 asset in contrast to Europe. region, five of which are based in the UK. The top managers in the US manage $30.5 trillion, 70% of 50 global asset managers are concentrated in just total Index value. 10 countries, and the leading six from a climate perspective are all European.

22 COUNTRIES / ASSET OWNERS TABLE 06 / TOP 10 COUNTRIES (BY AVERAGE SCORE), ASSET OWNERS * P7 countries

% OF ASSET OWNERS PROPORTION OF AUM TOTAL TOTAL 2016 % OF # ASSET AUM USD ASSET OWNERS COUNTRY PERFORMANCE RATING RANK COUNTRY LEADERS LAGGARDS LEADERS LAGGARDS OWNERS BILLIONS LEADERS LAGGARDS BBB 1 Sweden 40% 0% 37% 0% 10 $385 30% 0%

BBB 2 Norway 25% 0% 6% 0% 4 $992 25% 0%

BB 3 New Zealand 50% 0% 46% 0% 2 $47 0% 50%

BB 4 Finland 33% 0% 30% 0% 6 $206 0% 14%

B 5 Australia* 21% 0% 18% 0% 29 $887 18% 3%

B 6 France 31% 15% 42% 3% 13 $1,961 21% 21%

B 7 Netherlands* 18% 0% 43% 0% 22 $1,540 17% 11%

CCC 8 Denmark 13% 0% 11% 0% 8 $317 10% 20%

BBB CC 9 UK* 9% 12% 14% 5% 43 $3,171 14% 23%

CC 10 Ireland 0% 0% 0% 0% 2 $51 0% 0%

D 14 Canada* 0% 24% 0% 9% 25 $1,349 0% 44%

D 15 USA* 4% 63% 17% 43% 183 $10,382 5% 67%

D 17 Switzerland* 0% 29% 0% 26% 21 $931 0% 33%

D 21 Japan* 0% 26% 0% 18% 23 $5,702 0% 58%

Scandinavian funds are the most progressive on France is now a global leader in mandatory climate Australia (5th) and Netherlands (7th) continue to lead Sweden again tops climate risk. Sweden tops the table again – 40% of change related reporting and provides a model for the P7 major pensions markets, where roughly 20% its funds are Leaders, up from 30% – with Norway, other countries as the G20 prepares to consider of funds are Leaders. The UK follows (9th), although Finland and Denmark all appearing in the top 10. the TCFD’s recommendations. It will be interesting only 9% of its funds are Leaders, down from 14%. the country table, to watch the influence of these initiatives over the The US has slipped from 9th to 15th place, falling behind France has slipped to 6th place, eclipsed by the rapid coming year as more countries start to build climate Canada (14th). While there are some star performers, rise of New Zealand and Finland, who have moved disclosure into existing regulatory frameworks. only 4% of US based asset owners are Leaders with an average into 3rd and 4th place from just outside the top ten (down from 5%), while the vast majority – 63% worth last year. This is despite an increase in French asset $4.5 trillion – are Laggards failing to disclose any climate owner Leaders, to 31% from 21% last year. As the BBB. risk action. Canada, Switzerland (17th) and Japan (25th) landmark Article 173 disclosure requirements for have no funds in the Leaders group. institutional investors came into force in January 2016, French asset owners should improve on their already strong performance in the index. Our research period concluded before the 2016 annual reporting season, so the full effect of this should be seen in the next index, which will assess all asset owners on information prepared under this new requirement. 24 COUNTRIES / ASSET OWNERS TABLE 07 / LARGEST LAGGARD ASSET OWNER COUNTRIES (BY AUM)

RANK COUNTRY # ASSET OWNERS AUM USD BILLION REGION

1 KUWAIT 3 $666

2 SAUDI ARABIA 1 $654 COUNTRY PERFORMANCE 3 SINGAPORE 3 $404 4 QATAR 1 $304

5 RUSSIA 3 $114

6 KAZAKHSTAN 1 $91

7 IRAN 1 $62

8 ARGENTINA 1 $59

9 BRUNEI 1 $30

10 ALGERIA 1 $19

X 11 ISRAEL 1 $18

12 PORTUGAL 1 $16

13 EAST TIMOR 1 $16

14 INDIA 1 $14

15 POLAND 1 $12

▬▬ Three exceptions are Norway, Kuwait is the largest Laggard country, with no evidence A striking change this year is that eight of the top ten Fossil fuel of action to tackle climate risk across its $666bn of countries, controlling $4.4 trillion, 11% of Index AUM, already a leader, and both funds. However in April 2016, the heavily oil-dependent now have no Laggard funds ignoring climate risk. Azerbaijan and UAE who have gulf state set a renewable energy target of 15% of Last year this was only true of Sweden and Norway. producing countries improved their positions. energy consumption by 20303. Saudi Arabia comes Other major markets have improved significantly, second with $654bn, and has also recently announced with many asset owners at last starting to address consistently rank ▬▬ USA and China, who together its revolutionary $30-50bn National Renewable Energy climate risk in their portfolios. The proportion of control a third of index AUM, Programme4, joining another fossil fuel giant, the UAE, X-rated Laggards taking no action has fallen sharply which in January also announced a $163bn investment from 58% to 26% in Japan; from 44% to 23% in Canada; lowest for climate continue to disappoint. in clean energy5. Sustained low oil prices, the falling cost and from 23% to 12% in the UK. of renewables and the influence of the Paris Agreement 30% of Japanese asset owners included in the Index have had an historic impact in 2016. We hope these risk disclosure. are now PRI signatories, the benefit of which can be developments will lead more fossil fuel producing seen in improved policy, transparency on voting and the countries to follow Norway, Azerbaijan and UAE in range of climate mitigation strategies being employed. taking and disclosing climate action.

26 COUNTRIES / ASSET OWNERS FIGURE 05 / TOP 10 COUNTRIES LEADER/LAGGARD ASSET OWNER PERFORMANCE

PROPORTION OF LAGGARDS

Netherlands Norway Sweden COUNTRY PERFORMANCE Denmark New Zealand 0% Ireland

Australia Finland

10% UK France

20% Canada Japan Switzerland 30%

X 67% 63% 40% of Chinese funds The US has more are Laggards. than twice as many Laggards as 50% any other major pension market. 60% USA China 70%

The chart to the right illustrates the large proportion The 183 US funds are worth $10.4 trillion AUM, of global assets with Laggard owners, and highlights representing 26% of total Index AUM. However, 80% the importance of action by both the USA and China it has more than twice as many Laggards as any in investing in the global transition to a low carbon other major market: 63% of all funds, down just economy. 4% on last year, with $4.5 trillion of investments. 90% If these asset owners follow the lead of institutions China’s $3.2 trillion is controlled by just nine funds, 0% 10% 20% 30% 40% 50% 60% across the Atlantic and embrace climate-aware six of which are Laggards worth $2.6 trillion. investing they have the capacity to radically change China has championed green finance within the the climate finance landscape. PROPORTION OF LEADERS G20, and in January, announced a target of at least $360bn in renewables investment by 20202, but its = AUM investment industry need to improve on disclosure to ensure this global political leadership is evident.

28 COUNTRIES / ASSET MANAGERS TABLE 08 / TOP 10 COUNTRIES (BY AVERAGE SCORE), ASSET MANAGERS

% OF ASSET MANAGERS PROPORTION OF AUM TOTAL TOTAL # ASSET AUM USD COUNTRY PERFORMANCE RATING RANK COUNTRY LEADERS LAGGARDS LEADERS LAGGARDS MANAGERS BILLIONS AA 1 Netherlands 50% 0% 54% 0% 2 $819

BBB 2 Germany 0% 0% 0% 0% 2 $1,329

BB 3 UK 13% 0% 26% 0% 8 $4,305

CCC 4 France 0% 0% 0% 0% 4 $3,329

CC 5 Switzerland 0% 0% 0% 0% 2 $1,005

D 6 Italy 0% 0% 0% 0% 1 $468

D 7 Canada 0% 0% 0% 0% 1 $292

D 8 USA 0% 11% 0% 10% 27 $30,531

AAA D 9 Australia 0% 0% 0% 0% 1 $367

D 10 Japan 0% 0% 0% 0% 2 $991

Grand Total 4% 6% 4% 7% 50 $43,437

The Netherlands is the country with the best The UK, managing 10% of index AUM, comes third and All three perform fairly in Governance & Strategy and Netherlands leads performance on climate risk, and the only one to is poised to leap to a Leader position: three of its eight Risk Management, however only Blackrock lifts from achieve an AA rating. APG is the only AAA-rated funds are in a strong Challenger position, rated BBB: a bottom place in disclosure of Metrics & Targets. asset manager while Aegon Asset Management Aviva Investors, M&G Investors (Prudential’s asset The last category, quantification of the extent of low with the only also performs well with a CC rating. Germany ranks management arm) and Schroders and all perform very carbon investments, is an area where there is little second, with rated BB and well across all three capabilities. France, where four transparency industry-wide. Deutsche Asset Management rated B. big funds manage 8% of Index AUM, comes fourth. AAA-rated asset Another 18 asset managers, rated D, are only taking US asset managers account for more than half the first steps including $3,500bn Vanguard, manager. the Index and 70% of investments. Their six best $2,245bn State Street and $1,625bn BNY Mellon performers, managing $9.6 trillion, only rate C, Investment Management. including Blackrock, the world’s largest asset manager globally, with $4,645bn AUM, Goldman Sachs Asset Management with $1,252bn and JP Morgan Asset Management with $1,723bn.

30 CAPABILITIES / ASSET OWNERS

CAPABILITIES REVIEW

The survey comprises 37 questions covering the following three key areas assessing the asset owner’s capability in managing portfolio climate risk. The survey has been remapped this year to align to the FSB TCFD’s proposed framework for disclosure, to assist asset owners in assessing their readiness for any forthcoming reporting requirements.

GOVERNANCE & STRATEGY – Organisation structure and approach it uses to oversee climate risk objectives. – Degree of integration of climate risk principles in the organisation’s policies and processes.

PORTFOLIO RISK MANAGEMENT – Variety and effectiveness of tools and approaches used to evaluate and manage climate change related financial risks and opportunities. This includes engagement, voting practices, and portfolio management tools.

METRICS & TARGETS – Key metrics used to measure, monitor and compare portfolio climate risk management performance, including the value asset owners have invested in C low carbon assets. CAPABILITIES / ASSET OWNERS FIGURE 06 / ASSET OWNER AAA LEADERS CAPABILITIES

Local Government Super

New Zealand 100 % The Environment Agency Superannuation Fund Pension Fund

CAPABILITIES REVIEW Sjunde AP-Fonden 75 First State Super

50 Etablissement de New York State Common retraite additionnelle de Retirement Fund la Fonction Publique TABLE 09 / ASSET OWNER CAPABILITY LEADERS 25

RANKING GOVERNANCE & RANKING PORTFOLIO CARBON RANKING METRICS & TARGETS STRATEGY RISK MANAGEMENT Pensionskassernes 0 Stichting Pensioenfonds Administration ABP The Environment Agency 1 Pension Fund 1 Local Government Super 1 First State Super The Environment Agency 2 Local Government Super 2 Pension Fund 1 Fjärde AP-Fonden Stichting Pensioenfonds New York State Common Fonds de Réserve pour les 3 ABP 3 Retirement Fund 1 Retraites Church Commissioners Pensioenfonds for England Zorg en Welzijn California State Teachers' 4 Aviva Insurance 4 Retirement System 1 Tredje AP-Fonden Wespath Investment Stichting Pensioenfonds Vision Pooled 5 Management 5 ABP 5 Superannuation Trust Fonds de Réserve pour Kommunal Landspensjonskasse Pensionskassernes Elo Mutual Pension les Retraites Gjensidige Forsikringsselskap 6 First State Super 6 Administration 6 Insurance Company Church Commissioners for Pensioenfonds Zorg en Pensioenfonds Zorg en 7 England 7 Welzijn 7 Welzijn Elo Mutual Pension Fjärde AP-Fonden Insurance Company Pensionskassernes Ilmarinen Mutual Pension 8 Administration 8 Unilever Pension Funds 8 Local Government Super Insurance Company Ilmarinen Mutual Pension Kommunal Landspensjonskasse 8 Unilever Pension Funds 8 Insurance Company 8 Gjensidige Forsikringsselskap New York State Common Wespath Investment New York State Common Governance & Strategy Portfolio Carbon Risk Management Metrics & Targets 10 Retirement Fund 10 Management 10 Retirement Fund

Local Government Super and Environment Agency 25% of asset owners are now investing in low carbon The Metrics & Targets capability has also seen a The chart above demonstrates the performance of Pension Fund continue their tussle over top spot for assets such as green bonds and low carbon indices, big change this year. This is a keen area to watch the AAA rated Leaders across the three capabilities. two of the three capabilities assessed. Governance a 58% increase from last year. While not framed as as disclosure continues to improve. What we look While the first two capabilities are showing greater & Strategy and Risk Management have seen both a specific hedge strategy (only 2% disclose using for here is identification and quantification of both consistency amongst the Leaders, there are a few these funds in the top two for the last two years. low carbon as a active hedging strategy even though portfolio emissions and low carbon investments. funds who have outperformed in the Metrics capability: Aviva, First State Super, Unilever and PKA have all others have sought out clean opportunities, This should enhance even further, as responsible FRR, AP4, First State Super and Elo. notably improved their performance on Governance almost instinctively as a way to offset their high investment moves from a qualitative to a more & Strategy. carbon exposures), investment in these areas quantitative disclosure. Of the top 10 performance, diversifies a fund away from high carbon, the full strong movers this year were PFZW, Elo and NY State Risk Management practices have improved amongst value of which will remain opaque until more Common Retirement Fund. the leadership group, with exceptionally strong advanced methods of base case scenario analysis performance by Ilmarinen. Techniques are evolving and risk pricing of carbon at the portfolio level and many more asset owners are developing their become more widespread. The use of screens and capabilities in this area. Seven of the top ten in this exclusion criteria are also rapidly gaining favour. category are new this year.

34 CAPABILITIES / ASSET MANAGERS FIGURE 07 / TOP 10 ASSET MANAGERS CAPABILITIES

APG Asset Management

70 % Legal & General HSBC Global Asset Management 60 Investment Management CAPABILITIES REVIEW 50 40

30 Deutsche Asset Management 20 Aviva Investors TABLE 10 / ASSET MANAGER CAPABILITY LEADERS 10 RANKING GOVERNANCE & RANKING PORTFOLIO CARBON RANKING METRICS & TARGETS STRATEGY RISK MANAGEMENT 0

1 APG Asset Management 1 APG Asset Management 1 M&G Investments Legal & General Legal & General 2 Investment Management 2 Investment Management 1 APG Asset Management AXA Investment M&G Investments Schroders Investment Legal & General Managers 3 Aviva Investors 3 Management 3 Investment Management HSBC Global Asset Natixis Global Asset 4 Management 4 Aviva Investors 4 Management Deutsche Asset Dimensional Fund 5 Management 5 AXA Investment Managers 4 Advisors

6 Allianz Global Investors 6 Allianz Global Investors 6 Allianz Global Investors Natixis Global Asset Management Schroders Investment Management Schroders Investment BNP Paribas Investment 7 Management 7 M&G Investments 7 Partners Allianz Global Investors 8 Standard Life Investments 8 Aegon Asset Management 8 AXA Investment Managers Goldman Sachs Asset UBS Global Asset 9 management 9 Management 9 Aviva Investors BNP Paribas Investment Deutsche Asset Deutsche Asset Governance & Strategy Portfolio Carbon Risk Management Metrics & Targets 10 Partners 10 Management 9 Management

Asset managers generally perform strongest in Metrics & Targets is the only capability area where European managers dominate the Governance & Strategy, and average a score three the two groups perform relatively similarly. times that of asset owners, and indicates many are 34% of asset managers invest in low carbon assets, starting to equip their organisations to address the however with only $95bn quantified, transparency on capabilities performance rankings, implications of climate change on their investments. how much is invested lags asset owners, 25% of Particularly strong areas are incorporating climate whom disclose $203bn. Its difficult to draw conclusions change issues into policy framework, including a with APG Asset Management taking on how much capital is being directed towards the focus on stewardship and engagement approach. low carbon economy without this metric being more top place in two of the three categories, Risk Management also scores strongly, and again reported, and its unclear whether investors are even is double that of asset owners in this capability. able to identify this within their portfolios. It will be Key areas here include voting policy/activity and the interesting to watch how this develops as asset owners and second place in Metrics & Targets. range of climate risk mitigation approaches used. become more sophisticated in this area and seek out managers with a strong capability for managing a low-carbon tilted portfolio.

36 CAPABILITIES / ASSET OWNERS FIGURE 08 / PROPORTION OF ASSET OWNERS WITH STAFF WHO INTEGRATE FINANCIAL IMPACT OF CLIMATE CHANGE INTO THE INVESTMENT PROCESS GOVERNANCE & STRATEGY Leaders

Challengers

INTEGRATING CLIMATE RISK Learners 82% 3X 1/3 Increase in the number Increase in the number increase in the number asset owners integrating of Bystander asset of asset owners with a Bystanders climate change into their owners with a role role or team responsible policy framework. or team looking at for including climate financial considerations considerations in of climate risk in the investment process, investments. increasing from 67 to 89. Laggards

0 10 20 30 40 50 60 70 80 90 100

% WITH ROLE Has Has not

This year has seen a marked rise in asset owners In an indication of more strategic approach to All but one of the 34 Leaders (97%) have staff dedicated 42% of asset integrating climate change into their policy frameworks. managing the risks and opportunities presented by to integrating climate risk into their investment 42% of the Index now do this in some form, an increase the low carbon transition, 73 asset owners (15%) are approach, compared with just 18% of all Index from just 23% last year. This is the shift we have been now incorporating climate risk factors into their asset participants. The Challengers are fast closing the gap owners now waiting to see, and comes as a growing number of manager selection process, a 30% increase. 20% of on Leaders – 83% of this group now have this function – institutions take an ESG and Responsible Investment asset owners are now embedding climate change risk up from 75% last year. Even the D rated Bystanders incorporate approach. While only 20% of asset owners have a management into asset manager agreements, up from have started to create these roles – a sure sign this is dedicated climate change policy, either standalone or 12% last year. More than half this group refer to their becoming a mainstream approach. as a dedicated section within an ESG/RI policy, a further climate or ESG policy. However, a move towards climate change 20% of funds have implemented a broad ESG policy greater mandate length is still elusive – only a handful which covers climate change generally. of asset owners are currently doing this. into their policy Another policy trend is guidance on how investee companies are engaged on climate change issues. framework. 15% of asset owners now include this, up from 12% last year, a 25% increase.

38 CAPABILITIES / ASSET MANAGERS FIGURE 09 / PROPORTION OF ASSET MANAGERS WITH STAFF WHO INTEGRATE FINANCIAL IMPACT OF CLIMATE CHANGE INTO THE INVESTMENT PROCESS GOVERNANCE & STRATEGY Leaders

Challengers

INTEGRATING CLIMATE RISK Learners 36% 68% of asset managers have a standalone of asset managers have a role or team climate change policy and/or a responsible for including climate Bystanders dedicated section in ESG/RI policy. considerations in the investment process.

Laggards

0 10 20 30 40 50 60 70 80 90 100

% WITH ROLE Has Has not

36% of asset managers have a specific policy on 70% of Asset managers have a voting policy covering 90% of asset Compared with just climate change, either standalone or as a dedicated environmental issues, with 20 % explicitly stating section within their ESG or Responsible Investment support for climate change resolutions, usually centred policy. This exceeds the 20% of asset owners taking on disclosure and reporting. The other 50% consider managers 41% identified this advanced approach. Another 20% of managers climate resolutions on a case by case basis. have a specific ESG/RI risk assessment incorporated 68% of asset owners have staff who are responsible into their broader investment approach. In total, incorporate climate within their clients. for including climate change considerations in the almost all asset managers (90%) have some form of investment decision making. 28% of managers have policy, compared with just 41% identified within their specific team/role, split evenly between ESG or CIO change into their clients. This is a reflection of the growing importance reporting lines, while a further 36% has this covered as of broader responsible investment in the industry, part of the general remit of ESG staff. In total, nearly and may be in part driven by asset owners requiring policy framework. half of the AODP Index managers have this residing a more sustainable approach to investing, including within the risk function, as part of a broader ESG risk becoming PRI signatories. This is an exceptionally assessment of investments. good sign, indicating asset managers are filling the skills gap inherent in the majority of asset owners. 40 CAPABILITIES

PORTFOLIO RISK MANAGEMENT

CLIMATE-RELATED SHAREHOLDER RESOLUTIONS FIGURE 10 / ASSET MANAGERS VS ASSET OWNERS: VOTING RECORD ON CLIMATE

64% 16% 91% Asset Managers 64% of asset managers of asset owners 31 of 34 Leaders supported support for at least one supported at least one such resolutions, compared shareholder resolution shareholder resolution with 84% last year. Asset Owners 16% on climate change. on climate change (up from 12% last year) 0 10 20 30 40 50 60 70 80 90 100 PROPORTION OF INVESTORS SUPPORTING AT LEAST ONE CLIMATE CHANGE RELATED SHAREHOLDER RESOLUTION

Supported at least one Did not support

The big change in this year’s voting season was the As with asset owners, there’s a significant proportion In contrast, just 13% of asset owners were willing The number of level of management support, particularly on the of asset managers taking positive action on climate to go against management guidance for this vote strategic resilience resolutions championed by the change at corporate AGMs. (this was 46% vs 11% respectively for the similar Aiming for A investor coalition, and those following Chevron proposal). 64% of managers voted in favour of at least one climate –related a similar model. climate change resolution during the 2016 AGM However, as uncovered by AODP’s Investor Engagement The success of these resolutions is a testament season. Most importantly, 50% of managers were report6, of the three largest asset managers, only State shareholder to collaborative engagement which is challenging willing to vote against management in the Exxon Street was willing to support this resolution in defiance boards to recognise these issues and take action. #12 proposal requiring a report on climate change of management recommendation to vote against. resolutions US-based asset owners still lag behind their peers – impact assessment highlighting the growing concern only 14% of US funds voted in support of a climate of investors for the impact the shift to a low carbon change related resolution, compared to 48% in economy may have on the strategic business plans of continues to grow. Oceania and 21% in Europe. these fossil fuel majors.

42 “BP AND SHELL’S RESPONSES INDICATE THAT SUPPORTIVE BUT STRETCHING SHAREHOLDER RESOLUTIONS CAN PLAY A POSITIVE STEWARDSHIP ROLE. THEY FOCUS ATTENTION ON AN INCREASINGLY COMPLEX CAPITAL ALLOCATION CHALLENGE FOR ENERGY COMPANIES, INVESTORS AND POLICY MAKERS.”

HELEN WILDSMITH HEAD OF ETHICAL & RESPONSIBLE INVESTMENT AT CCLA CAPABILITIES FIGURE 11 / ASSET MANAGERS VS ASSET OWNERS: STRANDED ASSETS ASSESSMENT

Asset Managers 12% 18%

Asset Owners 6% 5%

PORTFOLIO RISK MANAGEMENT 0 10 20 30 40 50 60 70 80 90 100

PROPORTION OF INVESTORS ASSESSING STRANDED ASSET EXPOSURE FOR FOSSIL FUEL HOLDINGS

Yes, we measure stranded asset risks No, we do not consider this risk STRANDED ASSETS No, we manage these risks at the company/asset level

FIGURE 12 / ASSET OWNERS ASSESSING STRANDED ASSET EXPOSURE 12% 6% 68% FOR FOSSIL FUEL HOLDINGS Six asset managers Just 30 asset owners 23 Leaders measure this assess stranded assets measure portfolio-level in some way compared exposure for fossil fuel risk of stranded assets, with 45% last year. Leaders 23 9 holdings. up from 24 last year.

Others 7 16

0 10 20 30 40 50 60 70 80 90 100

PROPORTION OF ASSET OWNERS

Yes, we measure stranded asset risks No, we expect our managers to measure and manage these risks at the asset levels No information available

FIGURE 13 / ASSET MANAGERS ASSESSING STRANDED ASSET EXPOSURE While other key factors in managing the financial Additionally, a number of disclosers this year FOR FOSSIL FUEL HOLDINGS risks, and opportunities, of climate change have have indicated this is either currently underway begun to take hold, this is one key area that is still or on their agenda for the coming year, so we lagging at an overall Index level. Unsurprisingly, hope to see the results showing in next year’s it’s the Leaders who are taking significant steps report. Difficulties associated with identification, Leaders 2 here, with a 64% increase in their number who have measurement and cost are a potential cause of this undertaken this analysis during the past year. risk assessment not being more widely adopted. Others 4 9

0 10 20 30 40 50 60 70 80 90 100

PROPORTION OF ASSET MANAGERS

Yes, we measure stranded asset risks No, we manage these risks at the company/asset level No, we do not consider this risk 46 CAPABILITIES FIGURE 14 / ASSET MANAGERS VS ASSET OWNERS: PORTFOLIO CARBON EMISSIONS

Asset Managers 20%

Asset Owners 13%

METRICS & TARGETS 0 10 20 30 40 50 60 70 80 90 100

PROPORTION OF INVESTORS CALCULATING PORTFOLIO CARBON EMISSIONS

Yes No PORTFOLIO CARBON EMISSIONS FIGURE 15 / ASSET OWNERS CALCULATING PORTFOLIO CARBON EMISSIONS

20% 13% 50% Leaders 31 10 assets managers 66 assets owners 17 Leaders declare an calculate their portfolio calculate their portfolio emissions intensity Challengers 21 carbon emissions. carbon emissions – reduction target for next a 27% increase from year, almost doubling Learners 12 2016 (10%, 52). from last year (9, 29%).

Bystanders 2

Laggards

0 10 20 30 40 50 60 70 80 90 100

PROPORTION OF ASSET OWNERS Yes No

FIGURE 16 / ASSET MANAGERS CALCULATING PORTFOLIO CARBON EMISSIONS

While more asset owners are calculating their Some Leaders measure portfolio carbon footprint, Leaders 2 portfolio carbon emissions intensity, overall still but don’t set reduction targets, with lack of standards only 25 asset owners (5%) set an portfolio carbon and reliability of information often cited as a reason. emissions intensity reduction target, up from 14 The TCFD scenario analysis guidelines are likely to Challengers 5 (2.8%) last year. Many respondents have identified increase this significantly as more create bases cases the need to undertake further analysis before setting that are more carbon savvy than short term markets. such targets, so this number is expected to increase Learners 2 in the near term. Bystanders 1

Laggards

0 10 20 30 40 50 60 70 80 90 100

PROPORTION OF ASSET MANAGERS Yes No

48 CAPABILITIES FIGURE 17 / TOP 10 COUNTRIES FOR LOW CARBON INVESTMENT BY ASSET OWNERS PROPORTION OF AUM IN LOW CARBON INVESTMENT 4.0%

3.5%

METRICS & TARGETS New Zealand Netherlands 3.0%

2.5% LOW CARBON INVESTMENT Sweden

2.0% Denmark 26% 9.4% 68% Finland The Environment Agency APG Investment $203 billion or 0.5% of 1.5% Pension Fund highest Management is the top asset owner Index AUM Australia ranking asset owner with asset manager in both has been specifically 26% of AUM invested in proportion of AUM and identified as low carbon 1.0% low carbon investments. absolute terms, with investments, a 68% France UK ABP again ranks #1 in 9.4% and $41bn. increase from last year’s Norway absolute terms. $138bn (last year saw a 0.5% USA 63% rise). Canada

0.0% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

PROPORTION OF ASSET OWNERS DISCLOSING LOW CARBON INVESTMENT = Total Country LCI

This year sees another big increase in low carbon Only $95 billion or 0.2% of asset manager Index On a regional basis, it is clear that European asset If US asset owners matched the NZ investment investment, indicating disclosure is improving, AUM has been specifically identified as low carbon managers are much more transparent in quantifying proportion, their LCI would rise to $327 billion. more capital is transitioning into the low carbon investments, indicating a lower level of disclosure their low carbon investments, making up 98% of the If all countries were to divert the same percentage, economy or, more likely, a combination of both. and quantification by managers. APG Investment disclosed total. In total, 16 managers invest $93.3bn, an additional $1.3 trillion would flow into the low The difficulties of quantifying this persists, even Management ranks top on both a proportional and an average of 1.2% AUM. No manager within the Asia carbon economy. where investments are disclosed, often it is not absolute basis, with 9.4% AUM and $41bn disclosed. Pacific region quantified this. quantified. A key barrier is a clear methodology BNP Paribas ranks second, investing 3.4% of However, New Zealand leads the country table for defining which assets qualify as low carbon, its total AUM, or $21bn, in low carbon assets. for low carbon investment by asset owners on a across asset classes. Where possible, the Low M&G Investments takes third place. proportional basis 3.2% of total NZ Index AUM, Carbon Investment (LCI) Registry’s Taxonomy of while the US comes in top on an absolute basis with Eligible Investments has been used7. The Climate an aggregate of $55 billion invested in low carbon – Bonds Initiative continues to develop its Standard but this is only 0.5% of total US AUM reported in the and Certification8 framework, which provides a Index. In contrast, only one US manager quantifies useful tool for investors to assess the environmental low carbon investment of $1.4bn, 0.3% of their credibility of their investments. portfolio AUM.

50 THIS YEAR SEES ANOTHER BIG FIGURE 18 / LOW CARBON INVESTMENT BY ASSET MANAGERS (BY COUNTRY)

INCREASE IN LOW CARBON PROPORTION OF AUM IN LOW CARBON INVESTMENT

7% INVESTMENT, INDICATING Netherlands

DISCLOSURE IS IMPROVING 6% AND MORE CAPITAL IS TRANSITIONING INTO THE LOW 5%

CARBON ECONOMY. 4%

3%

2% France

UK 1% Germany

USA Switzerland Italy 0% 0 20% 40% 60% 80% 100%

PERCENTAGE OF ASSET MANAGERS DISCLOSING LOW CARBON INVESTMENT

= Total Counry LCD in USD

52 CLIMATE CHANGE IS NOW A MAINSTREAM CONCERN THROUGHOUT THE INVESTMENT COMMUNITY, AND ACTIVITY IS GATHERING UNSTOPPABLE MOMENTUM. A 60% MAJORITY OF ASSET OWNERS RECOGNISE THE FINANCIAL RISKS – AND OPPORTUNITIES – OF CLIMATE CHANGE, AND ARE TAKING ACTION, WITH GROWING NUMBERS SCALING UP THEIR ACTIVITIES. APPENDIX / ASSET OWNERS

COUNTRY TABLES

TABLE 11 / TABLE 12 / USA UK

2017 2017 2017 / 2016 ASSET OWNER NAME 2017 2017 2017 / 2016 ASSET OWNER NAME RATING RANK CHANGE RATING RANK CHANGE

AAA 3 2 New York State Common Retirement Fund (NYSCRF) AAA 2 1 The Environment Agency Pension Fund

AAA 17 3 United Nations Joint Staff Pension Fund (UNJSPF) AAA 12 2 Church Commissioners for England

AA 19 4 Wespath Investment Management (Wespath) AA 26 4 Aviva Insurance

AA 28 19 California Public Employees Retirement System (CalPERS) A 30 1 The Church of England Pensions Board (CEPB)

AA 29 4 California State Teachers' Retirement System (CalSTRS) BBB 38 4 Strathclyde Pension Fund (SPF)

A 32 15 University of California Retirement System (UC Regents) BBB 43 24 Old Mutual Group

A 33 9 TIAA Global Asset Management (TGAM) BBB 47 17 Greater Manchester Pension Fund (GMPF)

BBB 39 0 William and Flora Hewlett Foundation BB 54 21 TPT Retirement Solutions (Formally The Pensions Trust)

BBB 40 13 Teachers' Retirement System of the City of New York (NYC TRS) BB 55 37 Board of the Pension Protection Fund (PPF)

BBB 40 14 Employees Retirement System (NYCERS) B 63 25 Standard Life Group

56 APPENDIX / ASSET OWNERS

COUNTRY TABLES

TABLE 13 / TABLE 14 / SWITZERLAND NETHERLANDS

2017 2017 2017 / 2016 ASSET OWNER NAME 2017 2017 2017 / 2016 ASSET OWNER NAME RATING RANK CHANGE RATING RANK CHANGE

B 67 69 Zurich Insurance Group AAA 5 1 Stichting Pensioenfonds ABP (ABP)

CC 83 23 Oak Foundation AAA 6 12 Pensioenfonds Zorg en Welzijn (PFZW)

C 104 119 Swiss Federal Pension Fund (PUBLICA) AA 21 7 Bedrijfspensioenfonds voor de Landbouw (BPL)

D 150 21 Pensionskasse SBB (PK SBB) AA 22 9 Unilever Pension Funds

D 161 96 Pensionskasse Post (Pkpost) BBB 40 - Aegon N.V.

D 165 39 Swiss Re BB 49 47 Holding

D 181 36 Swiss Mobiliar Insurance & Pensions CCC 69 80 Bedrijfstakpensioenfonds voor de Bouwnijverheid (bpfBOUW)

D 186 6 Helvetia Group CCC 71 15 Stichting Pensioenfonds PGB

D 213 55 Compenswiss (Swiss Federal Social Security Funds) CCC 74 149 Pensioenfonds voor de Detailhandel (BpfD)

D 218 94 Pension Fund City of Zurich (PKZH) CCC 77 146 Pensioenfonds van de Metalektro (PME)

58 APPENDIX / ASSET OWNERS

COUNTRY TABLES

TABLE 15 / TABLE 16 / JAPAN AUSTRALIA

2017 2017 2017 / 2016 ASSET OWNER NAME 2017 2017 2017 / 2016 ASSET OWNER NAME RATING RANK CHANGE RATING RANK CHANGE

C 97 95 MS&AD Insurance Group AAA 1 1 Local Government Super (LGS)

D 113 74 Sompo Japan Nipponkoa Holdings, Inc. AAA 3 9 First State Super

D 146 13 Dai-ichi Mutual Life Insurance Company AA 18 11 AustralianSuper

D 149 55 Government Pension (GPIF) AA 19 - Vision Pooled Superannuation Trust (VPST)

D 176 81 Nippon Life Insurance Company (Nissay) A 31 7 BT Financial Group

D 207 50 Organization for Workers' Retirement Allowance Mutual Aid A 34 13 Victorian Superannuation Fund (VicSuper)

D 213 44 National Pension Fund Association BBB 35 0 MLC Super Fund

D 218 26 Tokio Marine Holdings, Inc. BBB 45 2 CareSuper

D 218 26 Sumitomo Mitsui Financial Group (SMFG) BBB 48 9 UniSuper

D 236 32 T/D Holdings, Inc. BB 50 10 Mercer Super Trust (MST)

60 APPENDIX / ASSET OWNERS

COUNTRY TABLES

TABLE 17 / TABLE 18 / CANADA FRANCE

2017 2017 2017 / 2016 ASSET OWNER NAME 2017 2017 2017 / 2016 ASSET OWNER NAME RATING RANK CHANGE RATING RANK CHANGE

B 61 10 OPSEU Pension Trust (OPTrust) AAA 11 5 Fonds de Réserve pour les Retraites (FRR)

Etablissement de retraite additionnelle de la Fonction Publique CC 83 66 Financial AAA 14 4 (ERAFP)

CC 85 64 B.C. Public Service Pension Plan AA 23 17 AXA Group

C 86 106 Industrial Alliance Insurance and Financial Services (IA) AA 24 11 Caisse des Dépôts (CDC)

C 89 28 B.C. Teachers Pension Fund CCC 76 11 CNP Assurances Group

C 89 134 B.C. Municipal Pension Plan (MPP) CC 79 125 BPI France (BPI)

C 104 88 Great-West Lifeco Inc. (GWL) C 96 15 Crédit Agricole Assurances (CAA)

C 106 31 Canada Pension Plan Investment Board (CPPIB) D 129 57 MAIF

C 109 44 Ontario Teachers Pension Plan (OTPP) D 207 94 SCOR Group (SCOR)

D 141 116 Alberta Heritage Savings Trust Fund (HSTF) D 247 77 Natixis Insurance Division

62 APPENDIX / ASSET OWNERS

COUNTRY TABLES

TABLE 19 / TABLE 20 / SCANDINAVIA SWEDEN

2017 2017 2017 / 2016 ASSET OWNER NAME 2017 2017 2017 / 2016 ASSET OWNER NAME RATING RANK CHANGE RATING RANK CHANGE

AAA 7 12 Kommunal Landspensjonskasse Gjensidige Forsikringsselskap (KLP) AAA 8 5 Fjärde AP-Fonden (AP4)

AAA 8 5 Fjärde AP-Fonden (AP4) AAA 16 16 Sjunde AP-Fonden (AP7)

AAA 9 214 Ilmarinen Mutual Pension Insurance Company AA 25 17 Andra AP-Fonden (AP2)

AAA 10 69 Elo Mutual Pension Insurance Company AA 27 19 Tredje AP-Fonden (AP3)

AAA 13 7 Pensionskassernes Administration (PKA) BBB 36 38 Folksam Group

AAA 16 16 Sjunde AP-Fonden (AP7) BB 52 14 Sjätte AP-Fonden (AP6)

AA 25 17 Andra AP-Fonden (AP2) BB 53 30 AMF

AA 27 19 Tredje AP-Fonden (AP3) B 60 4 KPA Pension

BBB 36 38 Folksam Group CCC 70 18 Första AP-Fonden (AP1)

BBB 36 54 Storebrand ASA CCC 78 16 Alecta

64 APPENDIX / ASSET OWNERS TABLE 22 / NORWAY

2017 2017 2017 / 2016 ASSET OWNER NAME RATING RANK CHANGE COUNTRY TABLES AAA 7 12 Kommunal Landspensjonskasse Gjensidige Forsikringsselskap (KLP)

BBB 36 54 Storebrand ASA

BBB 44 0 Government Pension Fund Global (GPFG) TABLE 21 / D 132 46 Government Pension Fund Norway (GPFN) DENMARK

2017 2017 2017 / 2016 ASSET OWNER NAME RATING RANK CHANGE AAA 13 7 Pensionskassernes Administration (PKA) TABLE 23 /

BB 59 198 Danica Pension

B 62 13 Velux Foundation FINLAND

B 63 19 PensionDanmark 2017 2017 2017 / 2016 ASSET OWNER NAME RATING RANK CHANGE

D 133 3 PFA Pension AAA 9 214 Ilmarinen Mutual Pension Insurance Company

D 136 40 Pensionskassen for Magistre & Psykologer (MP Pension) AAA 10 69 Elo Mutual Pension Insurance Company

D 160 16 Sampension B 66 157 Varma Mutual Pension Insurance Company

D 161 65 Arbejdsmarkedets Tillaegspension (ATP) D 205 29 Local Government Pensions Institution (Keva)

D 213 44 Sampo Group

D 255 132 Valtion Eläkerahasto (State Pension Fund)

66 APPENDIX / ASSET MANAGERS TABLE 25 / REGION: ASIA PACIFIC

2017 2017 ASSET MANAGER NAME RATING RANK

D 33 Macquarie REGIONAL TABLES D 34 Sumitomo Mitsui Trust Group D 46 Nomura Asset Management

TABLE 24 / REGION: EMEA TABLE 26 / REGION: AMERICAS

2017 2017 ASSET MANAGER NAME 2017 2017 ASSET MANAGER NAME RATING RANK RATING RANK

AAA 1 APG Asset Management C 15 Goldman Sachs Asset management

AA 2 Legal & General Investment Management C 16 BlackRock Inc

BBB 3 Aviva Investors C 18 J.P. Morgan Asset Management

BBB 4 M&G Investments C 18 Morgan Stanley

BBB 5 Schroders Investment Management C 21 PIMCO

BB 6 Allianz Global Investors C 23 AllianceBernstein

BB 7 Natixis Global Asset Management D 24 Dimensional Fund Advisors

BB 8 AXA Investment Managers D 25 State Street Global Advisors

B 9 Deutsche Asset Management D 26 Columbia Threadneedle Investments

B 10 HSBC Global Asset Management D 28 RBC Global Asset Management

68 APPENDIX / ASSET OWNERS TABLE 28 / ASSET OWNERS BY RATING SUMMARY TABLE

# ASSET CHANGE AUM USD CHANGE OWNERS BILLION CATEGORY 2017 2016 # % 2017 2016 # % DATA TABLES Leaders Top 7% A PACK 34 31 3 10% $4,163 $2,678 $1,484 55% Challengers 7% – 14% B PACK 34 25 9 36% $3,103 $3,386 -$284 -8%

Learners 14% – 22% C PACK 44 41 3 7% $3,395 $3,356 $39 1%

TABLE 27 / RATINGS BANDS Bystanders 22% – 60% D 187 157 30 19% $16,556 $13,969 $2,587 19% Bottom 40% Laggards X 201 246 -45 -18% $12,508 $14,348 -$1,840 -13% Zero score 2017 2016 CHANGE Total 500 500 $39,725 $37,737 $1,988 5%

RATING # ASSET AUM # ASSET AUM # % OWNERS USD BILLION OWNERS USD BILLION

AAA 17 $1,230 12 $1,141 5 42% TABLE 29 / ASSET OWNERS BY CATEGORY SUMMARY TABLE AA 12 $1,888 8 $641 4 50%

A 5 $1,044 11 $896 -6 -55% # ASSET CHANGE AUM USD CHANGE OWNERS BILLION BBB 14 $1,537 15 $2,280 -1 -7% CATEGORY 2017 2016 # % 2017 2016 $ %

BB 11 $956 4 $17 7 175% Endowment C 11 12 -1 -8% $342 $356 -$14 -4%

B 9 $611 6 $1,089 3 50% Foundation CC 9 8 1 13% $179 $166 $13 8%

CCC 10 $764 8 $570 2 25% Pension fund C 307 322 -15 -5% $15,363 $15,868 -$505 -3%

CC 7 $419 17 $1,092 -10 -59% Sovereign wealth fund D 35 38 -3 -8% $5,987 $5,821 $166 3%

C 27 $2,212 16 $1,695 11 69% Insurance company D 137 118 19 16% $17,802 $15,458 $2,344 15%

D 187 $16,556 157 $13,969 30 19% CCC 1 2 -1 -50% $51 $67 -$16 -24%

X 201 $12,508 246 $14,348 -45 -18% Total 500 500 $39,725 $37,737 $1,988 5%

Total 500 $39,725 500 $37,737

70 APPENDIX / ASSET MANAGERS

DATA TABLES

TABLE 30 / RATINGS BANDS TABLE 31 / ASSET MANAGERS BY RATING SUMMARY TABLE

RATING # ASSET AUM CATEGORY # ASSET AUM MANAGERS USD BILLION MANAGERS USD BILLION

AAA 1 $442 Leaders Top 4% A PACK 2 $1,582

AA 1 $1,140 Challengers 4% - 20% B PACK 8 $4,649

A 0 $- Learners 20% - 46% C PACK 13 $13,451

BBB 3 $1,283 Bystanders 46% - 94% D 24 $20,557

Bottom 6% BB 3 $2,156 Laggards X 3 $3,199 Zero score

B 2 $1,210 Total 50 $43,437

CCC 1 $671

CC 3 $1,359

C 9 $11,421

D 24 $20,557

X 3 $3,199

Total 50 $43,437

72 APPENDIX RATINGS BANDS

RATING CATEGORY DESCRIPTION FACTORS

AAA Leaders Elite Demonstrates elite performance across all capabilities

AA Leaders Excellent Demonstrates excellence in all capabilities METHODOLOGY A Leaders Extremely Strong Demonstrates strong performance across capabilities BBB Challengers Very Strong Taking advanced actions in mulitple capabilities

BB Challengers Strong Developing sophistication across multiple capabilities

B Challengers Advancing Progressing to a wider variety of capabilities The AODP Global Climate 500 Index provides The survey comprises 37 questions covering the stakeholders with a ranking and rating to indicate following three key areas assessing the investor’s CCC Learners Above Average Considerable tangible action taken in at least one capability how each major performs in capability in managing portfolio climate risk: managing their exposure to climate risk. The objective CC Learners Developing Progressively more action taken in at least one capability of the survey is to encourage integration of climate change capability in portfolio management across the C Learners Average Starting to take action in at least one capablitity investment sector. Limited disclosure on financial implications of climate D Bystanders Below Average change in investments No evidence of considering financial implications of climate X Laggards Zero Score GOVERNANCE & STRATEGY change in investments – Organisation structure and approach it uses to oversee climate risk objectives. – Degree of integration of climate risk principles in the organisation’s policies and processes.

The survey has been remapped this year to align The top 500 asset owners (by AUM) and any of the to the FSB TCFD’s proposed framework for top 50 asset managers that decline the invitation to PORTFOLIO RISK MANAGEMENT disclosure, to assist asset owners and managers participate are researched by our team of analysts – Variety and effectiveness of tools and approaches used to evaluate and manage in assessing their readiness for any forthcoming and assessed using publicly available information climate change related financial risks and opportunities. This includes reporting requirements. Past years’ results have also or information provided to us by their members engagement, voting practices, and portfolio management tools. been realigned in these categories to reflect the new or stakeholders. Investors are scored on actions categories to maintain comparability. implementing elements of climate risk best practice in their investment process. The ratings are based on a mixture of publicly available information and asset owner disclosures. The world’s Once all research is completed, peer reviewed and METRICS & TARGETS largest long-term asset owners (pension funds, validated; the Ratings Manager aggregates all scores. insurers, sovereign wealth funds, foundations and Annual rating bands are determined statistically and – Key metrics used to measure, monitor and compare portfolio climate risk endowments) with at least USD2 billion in assets under each participant assigned a rating applicable to their management performance, including the value asset owners have invested in C management were invited to participate in this year’s aggregated score, from AAA through to D grade, with an low carbon assets. survey. This year, we also invited the Top 50 global asset additional X category for those that appear to be doing managers to participate. Survey responses were used absolutely nothing to manage climate risk. to rank and rate the asset owners to create the AODP Global Climate 500 Index.

74 ACKNOWLEDGEMENTS

REPORT WRITTEN AND PRODUCED BY: LEANNE BOUVET, PAVEL KIRJANAS THE ASSET OWNERS DISCLOSURE PROJECT GIVES SPECIAL THANKS TO THE FOLLOWING PEOPLE IN PRODUCING THIS REPORT: BENITA AINABE, FRÉDÉRIC BACH, JEREMY BOURDON, ANDREW CAESAR, CLARENCE GAN, ROSS GRAY, WENDY HAPGOOD, WENXIN HUAI, TERESA KNOERR, LOUISE MACDONALD, REBECCA MACIES, EFUA MERCER, TIFFANY PAN, LISA STAHL, BONITA YIP THE ONGOING SUPPORT OF AODP’S FUNDERS IS ACKNOWLEDGED. A FULL LIST CAN BE FOUND ON OUR WEBSITE (WWW.AODPROJECT.NET). THE VIEWS IN THIS REPORT REMAIN THOSE OF AODP.

REFERENCES

1 http://uk.reuters.com/article/uk-britain-gib-court-idUKKBN1792XV

2 https://www.nytimes.com/2017/01/05/world/asia/china-renewable-energy-investment.html?_r=0

3 http://news.kuwaittimes.net/website/renewable-energy-covers-15-kuwaits-consumption-2030-minister-gcc-states-invest-100-billion-renewable-energy/

4 http://fortune.com/2017/01/16/saudi-arabia-renewable-energy-program/

5 http://money.cnn.com/2017/01/11/news/economy/uae-alternative-energy-investment/

6 http://aodproject.net/exxonmobil-investor-engagement-report/

7 http://globalinvestorcoalition.org/wp-content/uploads/2015/10/LCI-Registry-Taxonomy_3rd-Release_211015.pdf

8 https://www.climatebonds.net/standards

76 WWW.AODPROJECT.NET