A study commissioned by HSBC has found that more than two-thirds of institutional investors are planning to increase investments related to tackling climate change.

While the indications are that green investment is moving more from a peripheral to a mainstream activity, there is some frustration at inadequate disclosure from companies of the risks associated with climate change, the FT reports.
Green investment
According to the survey, more than half of the 497 institutional investors surveyed said they were receiving “highly inadequate” information from companies about their risk of disruption from climate change — as well their ability to benefit from the shift to low-carbon technologies.

Mark Carney, governor of the Bank of England, has called for greater disclosure of “climate risks” in the corporate and financial sectors, warning that investors risk “potentially huge” losses from the impact of climate change on industries ranging from insurers, which face increased losses from extreme weather, to producers of the fossil fuels blamed for rising temperatures.

The survey by East & Partners, a financial market research firm, found that fund managers were increasingly focused on opportunities as well as threats related to action against global warming. Appetite for green investments, such as renewable energy, was strongest in Europe, where 97 per cent of respondents planned to increase capital allocations in low-carbon technology or other assets that stand to benefit from climate policies.

In the Americas, the figure was 85 per cent, followed by Asia at 68 per cent.

Daniel Klier, head of strategy at HSBC, said the findings showed green finance was moving beyond the realm of specialist “ethical” funds and becoming a routine part of many investment decisions. “It is being embedded across the investment community,” he said.

Investors needed more reliable disclosures from companies upon which to assess risks and opportunities from climate policies, such as tougher regulation of fossil fuels and energy-intensive industries.