How are investors addressing Article 173 for the sovereign asset class?
With metrics for climate-related disclosure an increasingly important subject at both the European and international level, we decided to revisit a recent Research Note on the state of implementation of Article 173 in France.
- 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 the internal analysis they are already conducting and developing.
- Green bonds are attracting an increasing interest from investors.
- 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
Source: Beyond Ratings