Perpetual has no overarching climate risk strategy

1 November 2018

Financial services giant Perpetual Ltd today failed to inspire any confidence from shareholders concerned about the world’s ever growing climate emergency. Grilled over how it plans to manage the risks associated with global warming at its annual general meeting, the AUD$30 billion fund manager came up seriously short.

Responding to a shareholder’s question on Perpetual’s climate policy, chairman Tony D’Aloisio admitted: “Do we have any overarching policy or direction. No.”  Watch below:

For a company with such a huge and diverse investment portfolio, to not disclose climate risks to shareholders is shortsighted. Not to mention somewhat hypocritical, given its membership of the Investor Group on Climate Change (IGCC), which aims to ensure the risks and opportunities linked to global warming are incorporated into investment decisions.

It’s also a member of the Responsible Investment Association of Australia (RIAA) and a signatory to the UN Principles for Responsible Investment. 

The truth is, Perpetual can put its name to as many of these groups as it likes, but without real climate action and disclosures these memberships are meaningless. Perpetual has recently reported a rise in its Scope 1 and 2 emissions, has not disclosed the carbon footprint of its investment portfolios, and also fails to mention the Paris climate agreement in its financial report.

A shareholder asked the chairman if Perpetual supported the Paris Climate Agreement. D’Aloisio’s reply was that it’s not a company board matter, but rather “a broader political question” and so “as a board, no, we have not passed a resolution to that effect.”  Watch below:

Perpetual is clearly lagging when it comes to climate risk management. If the financial services giant was the good corporate citizen it claims to be, you’d at least expect it to support the global goal of limiting warming to well below 2 degrees. 

As a company that operates in the financial sector, Perpetual is regarded as at ‘high-risk’ from the potential impacts caused by climate change. Yet the financial services firm has not released any analysis to shareholders detailing its financial resilience under different climatic scenarios. 

With global warming occurring at an increasingly alarming rate, Perpetual has done little to demonstrate how it will manage the very real climate risk it could face. The best case scenario for shareholders at this stage, is that they will see company-wide climate risk disclosure next year. 

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