Institutional investors representing US$850 billion in AUM signed the Montreal Carbon Pledge today.
These investors, which include CalPERS and Canada’s Bâtirente, will measure and publicly disclose their portfolios’ carbon footprints each year. The United Nations Principles for Responsible Investing will oversee the pledge.
Carbon footprinting enables investors to quantify the carbon content of a portfolio. And this quantification extends to the stock market: 78% of the largest 500 public companies now report carbon emissions.
“The main reason to carbon footprint and decarbonize portfolios is not an ethical or moral one for asset owners — it is a financial risk imperative,” says Julian Poulter, executive director of the Asset Owners Disclosure Project.
As for investors, “There is a perfect storm of reported carbon data, reliable portfolio carbon measurement tools and low carbon investment solutions,” says Toby Heaps, CEO of Corporate Knights, a Toronto-based company focused on environmentally responsible capitalism. “This makes it possible for investors to […] reduce their carbon exposure like never before.”
The pledge’s online portal will let investors report the size of their portfolio carbon footprint commitment, and any associated carbon reduction targets.
Today’s signatories are Bâtirente, CalPERS, Calvert Investments, Environment Agency Pension Fund, Etablissement du Régime Additionnel de la Fonction Publique, The Joseph Rowntree Charitable Trust, Nordea and PGGM Investments.