South Africa: Asset managers need to raise their game on climate change, survey finds
Financial asset managers in Africa’s largest generator of carbon emissions need to do more to turn words on climate change into action, a survey in December finds.
Just Share surveyed 31 South African asset managers to assess their approach to climate risk in their investment decisions.
While there are some encouraging signs among local asset managers, there is a long way to go, says Robyn Hugo, director of climate change engagement at Just Share. “Relatively few of them demonstrate excellence when assessed against international best practice standards,” she says. “Those that do align with international best practice do so in some areas, but not in all.”
Many asset managers run marketing campaigns to convince clients of their responsible investment credentials. But there is no standard format or requirement for this information, and no professional body in South Africa which analyses and verifies the credentials, the report argues. The result is that there is “no way to distinguish between those asset managers who are taking climate risk seriously and those who are not.”
Research by the late Robert Scholes and Francois Engelbrech at the University of the Witwatersrand published in September found that southern Africa is particularly vulnerable to climate change because of its geographical location and state of development. Warming in the interior of southern Africa is occurring at about twice the global average, the research found.
- Yet South African companies such as energy and chemical giant Sasol have drawn criticism for refusing to table shareholder-proposed resolutions on climate change from organisations including Just Share.
- Many managers in the Just Share survey do not appear to focus on climate risk, but rather consider that it is adequately covered by a broader (environmental, social, and governance) ESG approach, the survey finds.
A survey has found that asset managers on the continent need to do more to combat climate change.
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