Media Release: Colonial First State Global Asset Management (CFSGAM) has today published its ninth annual Responsible Investment and Stewardship Report
News | 11 May 2016
Colonial First State Global Asset Management commits to increased quality of
climate risk disclosure in latest Responsible Investment report Media Release
(AUS version) 11 May 2016.
Colonial First State Global Asset Management
(CFSGAM) has today published its ninth annual Responsible Investment and
Stewardship Report, in which it further enhances its reporting and disclosure on
environmental, social and governance (ESG) issues, including disclosing its
climate risk exposures across a number of asset classes for the first time. The
report includes 34 case studies to illustrate the firm’s approach to
The report outlines CFSGAM’s plans to further integrate ESG
considerations into its investment strategies and highlights the approaches
taken to deepen the understanding of how climate risk may impact long-term
Mark Lazberger, Chief Executive Officer at CFSGAM said: “This
year’s report provides our clients with many examples of how we are striving to
achieve the highest standards of responsible investment and stewardship practice
and disclosure on their behalf, across our investment business.
believe that ESG issues comprise sources of long-term risk and return and
therefore directly impact the investment outcomes we deliver for our clients.
Although we have achieved many of the goals we have set ourselves and continue
to deliver strong investment performance, we still have much work to do to
improve our understanding and knowledge of emerging ESG issues and to improve
our practices in response to our clients’ increasing interest and scrutiny.”
In the 2016 report, CFSGAM has made a commitment to improving climate risk
disclosure with active equity teams disclosing fossil fuel (gas or other) and
non-fossil exposures, both by percentage of companies and by assets under
stewardship for the first time. This is accompanied by statements on how teams
see and manage climate change issues and risk.
CFSGAM has an integrated
approach to responsible investing, but encourages each team to implement this in
a way most effective for their asset class and investment strategy. Investment
teams highlight some of the challenges and opportunities facing them as
Emerging Markets Debt: the economic
transformations required in response to climate change can become an opportunity
for emerging markets. For example, Morocco has large potential in solar energy
and has been able to operate the world’s largest solar power plant, reducing its
dependency on high carbon fossil fuel imports.
Infrastructure: for energy utilities, energy infrastructure and railways,
carbon exposure has the potential to lower a company’s overall quality score.
Carbon risk is accounted for within the team’s financial models as it has direct
implications for the earnings potential of an infrastructure business. For
example, with the use of coal declining in the US along with tax incentives for
renewables, the team have adjusted their freight rail volume numbers to take
this structural change into account.
Will Oulton, Global Head,
Responsible Investment at CFSGAM said: “Our approach to responsible investment
and stewardship continues to be client focused and investment driven. We believe
the varied approaches of our individual investment teams are a key attribute of
our business and are enhanced by our improving systems for ESG risk assessment
and our strengthened RI governance structure.
“We believe that climate
change will impact the long-term performance of our clients’ assets in different
ways. As allocators of capital, shareholders and stewards, the analysis,
engagement and subsequent decisions we make will have an influence on our
clients’ long-term interests.”
View the online report