LAPFF investigates finance sector’s climate impact

July 20th 2020



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Engagements between LAPFF and leading insurers, asset managers and banks reveal financial institutions prefer using investment strategies rather than insurance products to mitigate climate change impact.

Following five meetings with organisations in which LAPFF members invest, the Forum found financial companies focus on how they invest as a means of managing climate risk as opposed to considering insurance products and services.

The engagements also show that financial companies assess climate risks to the business, but pay less attention to how both insurance or investment products might address environmental impact. Even companies heavily weighted toward insurance have thought about climate risk far more in terms of how they invest than how they insure.

However, in a first for investor action on climate change, 99% of Barclays Bank shareholders passed a resolution to align the company’s financial services with the goals and timelines of the Paris Agreement for all sectors starting with, but not limited to, the energy and power industries.

The resolution, which passed in May, was supported by LAPFF and followed lengthy engagement between the Forum and the bank.

Cllr Doug McMurdo, Chair of Local Authority Pension Fund Forum, said:

“While the Barclays’ result is a genuine victory for sustainable investment, it is clear we will need to keep up the pressure for the change to be implemented and if we are to instigate change at other organisations.”