How are investors addressing article 173 for the sovereign asset class ?

All - Oct 18 2018

Research note

A 2018 review of the reporting practices of 50 investors and analysis of trends compared with 2017. Under French law investors were required for the second time in 2018 to release their reporting on the requirements of Article 173.

In continuity with our assessment of the first round of reports that were released a year ago, Beyond Ratings has examined reports published this year and to provide insight on how the requirements of Article 173 are addressed by asset owners and asset managers with regards to the sovereign asset class.

Key Findings


  • Most investors comply with their Article 173 obligations by publishing a dedicated report.
  • Reports are generally more complete than last year, thus showing that investors have a better grasp on climate and carbon issues as well as on their reporting obligations.
  • The sovereign asset class is referenced in 78% of ESG strategies in our sample (versus 55% in 2017)
  • Carbon footprints are becoming standard: 86% of the investors in our sample conduct a carbon footprint and 38% of the panel have published the carbon footprint of their sovereign assets.
  • Some investors are developing new metrics and some of them also plan to extend their reporting based on internal analysis they are already conducting and developing.
  • Reports still lack homogeneity and the metrics need to be harmonized to allow for comparability.
  • Among challenges for future developments in the sovereign asset class, we identify for example the need for the development of specific benchmarks that integrate climate and carbon criteria. 

    Guillaume Emin, Carbon/Climate Analyst, Nathan Breen, Climate Analyst Intern - Sources: Beyond Ratings

     
     
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