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Fund firms get weather warning

UK asset managers have failed to adapt to the prospect of climate change, according to research from public relations group the Headland Consultancy.

The report, which surveyed 19 UK asset managers with 3 trillion of funds under management, found that although fund manager opinion has been stimulated by Government commissioned reports such as the Stern Review on the economic impact of climate change, it has yet to change mainstream investment behaviour.

Released ahead of the launch of climate change funds from Jupiter and Schroders, the report claims that the cumulative effect of climate change may not affect fund manager behaviour as it falls outside a fund manager’s shorter-term remit as “they are not looking at 2012, let alone 2050”.

Headland Consultancy partner Howard Lee says: “It was very interesting that the announcement of these two funds came the day after we commissioned this report. However, there are so many issues that have to be overcome, such as a correct framework for stock selection within these funds.”

The survey finds there is scepticism over whether individual CSR company reports are merely a tool just to get green groups off of a company’s trail.

It also claims that steps towards improving the situation could struggle to gain acceptance as a number of specialist vehicles are purely driven by socially responsible investment while contracts between pension managers and clients could frustrate strategy changes across a fund firm.

Fund managers are also concerned that the Government may impose change rather than allow the market to find its own solution.

Lee says: “There seems to be more pressure from governments to ensure that climate change is made a greater consideration among big firms but there needs to be a freedom to ensure that more firms continue to push into the market as a valid investment alternative.”

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