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Client pressure lesser of investors' worries

Megan Hernbroth
Jul 8, 2022
Illustration of two hundred dollar bills shaped like billowing smoke stacks
Illustration: Sarah Grillo/Axios

When it comes to climate risk, asset managers are more concerned about regulations and policy changes than they are about client pressure, a new survey finds.

Why it matters: Investors love to point to "client pressure" as the end-all-be-all of their climate risk approach, but other factors ultimately carry more weight.

By the numbers: Bloomberg's Climate Risk Analytics Survey polled more than 100 senior investment executives on their approach to assessing and acting on climate risk in their portfolios.

  • 84% of execs said their firms have started assessing climate, but just 5% of that group are in advanced stages.
  • Regulations and policy were the biggest reasons many investors chose to assess climate risk at all, with 25% of respondents indicating those were major factors.
  • Client pressure clocked in as a major factor with just 9% of respondents.

The bottom line: Portfolio performance (15%), risk to reputation (14%) and sensitivity to stress testing (12%) were higher than client pressure when it comes to undertaking a massive risk assessment, the survey found.

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