Principles for Responsible Investment, which describes itself as the world’s leading proponent of responsible investing, has launched an investor tool that analyses the climate risk of equity and fixed income assets in a portfolio.
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The Paris Agreement Capital Transition Assessment (Pacta) tool was developed by the PRI in conjunction with climate thinktank the 2° Investing Initiative.
It calculates climate transition risk in portfolios, allowing investors to see the existing climate risk in their portfolio and how this might change if global temperatures continue to rise.
Outputs from the tool can be downloaded into a 30-page report, which includes an analysis of how a global increase in temperature of two degrees will impact assets, sectors and regions.
Enhance returns and manage risk
“The PRI anticipates that this tool will help reduce information barriers for investors on how climate scenario analysis could be done,” Fiona Reynolds, chief executive of the PRI, said in a statement.
“The launch of this tool, as well as solutions offered by other service providers, means there are even fewer reasons for investors not to get started.”
Stan Dupré, chief executive and founder of the 2° Investing Initiative, added: “We developed the Pacta tool to enable investors to conduct climate change scenario-based analysis of their portfolios.
“The Pacta tool also fosters comparability between portfolios in the absence of a reporting standard on metrics. This is what makes it attractive to financial supervisors… and governmental authorities.”
The PRI encourages investors to use responsible investment to enhance returns and better manage risks.
It is supported by the UN but is not a part of it.
