POWERED BY MOMENTUM MEDIA
Climate risk a human rights risk
Climate change will have a devastating impact on human rights and institutional investors must consider these impacts when addressing climate change risk in their portfolios, according to a report.
That is the bottom-line assessment the ‘Human rights and climate change: a guide for institutional investors’ report from KPMG Australia and the Responsible Investment Association Australasia (RIAA).
The research indicated institutional investors were still prioritising environmental impacts over harm to people when addressing climate change risk in their portfolios, despite increasing attention being paid to environmental, social and governance (ESG) risks.
These ESG risks were often siloed, which meant that climate-related human rights impacts were inadequately addressed.
The research pointed out that this gap was a risk to institutional investor trustees that must be addressed as an urgent matter of prudent risk management.
Richard Boele, KPMG Australia chief purpose officer, said COP26 reinforced this was a critical moment for action on ESG matters.
“Technological and regulatory shifts are urgently required to achieve decarbonisation and the transition towards a sustainable global economy,” Boele said.
“For the transition to be made in a way that minimises harm to people, human rights must be at the centre of the response”.
Simon O’Connor, RIAA chief executive, said: “Global trends in regulation, litigation and social expectation represent significant risk for investors who fail to engage with climate-related human rights impacts in their portfolios. For institutional investors, risk to people directly translates to risk to business”.
Boele said institutional investors who controlled trillions of dollars were uniquely placed to effect meaningful change by mitigating and addressing the risks and impacts associated with climate change.
“Investors can exercise their collective influence and significant leverage to pursue sustainable and socially responsible outcomes across the global economy,” Boele said.
“As the business community and governments move towards net zero there is an unmistakable intersection between planet and people.
“Investors need to be alive to the risks and embrace the opportunities to lead. Placing human rights impacts at the centre of your analysis of climate change will give depth to your responsiveness and help us transition justly.”
Recommended for you
In its pre-election policy document, the FSC highlighted 15 priority reforms, with superannuation featuring prominently, urging both major parties to avoid changing super taxes without a comprehensive tax review.
The Grattan Institute has labelled the Australian super system as “too complicated” and has proposed a three-pronged reform strategy to simplify superannuation in retirement.
Super funds delivered a strong 2024 result, with the median growth fund returning 11.4 per cent, driven by strong international sharemarket performance, new data has shown.
Australian Ethical has seen FUM growth of 27 per cent in the financial year to date.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI Second Close
32.68 3 y p.a(%)
2
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.72 3 y p.a(%)
3
Spire Oaktree Opportunities XI First Close USD
31.36 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
29.60 3 y p.a(%)
5
Global X GlobalX FANG+ ETF
27.64 3 y p.a(%)
