CDP has partnered with ISS-Ethix to launch the world’s first climate impact rating for investment funds, called Climetrics, yet another tool in the company’s arsenal to empower investors to make climate-friendly investments.
CDP, formerly the Carbon Disclosure Project, is primarily dedicated to expanding global disclosure of greenhouse gas emissions from major corporations. As a result, CDP has built what it describes as the world’s “most comprehensive collection of self-reported environmental data in the world.” So far, CDP’s network of investors and purchasers represent more than $100 trillion in assets who, along with policy makers around the world, use CDP’s data and insights to make better-informed investment decisions. ISS-Ethix on the other hand is a part of ISS, the “world’s leading provider of corporate governance and responsible investment solutions.”
Ratings provided will be issued on a scale of one green leaf to five and will enable investors to reliably gauge the climate impact of investments in funds, while potentially encouraging the growth of climate-responsible investing, and increase the importance of climate-friendly funds. A first-of-its-kind rating system like this not only provides climate-aware investors with the opportunity to properly direct their investments but also increases the likelihood and pressure on funds to modify their own level of climate risk. Climetrics currently covers more than 55% of the assets invested in equity funds currently for sale across Europe, which represents about €2 trillion in fund investments.
“For the first time, investors in funds will be aware of their funds’ climate impact and can judge investments accordingly,” said CDP’s Executive Chair Paul Dickinson. “Climetrics is a missing link between individual investment choices and the global problem of climate change, and will move the needle in incentivising both investors and companies to contribute to the low-carbon transition.”
“Climate change related investment risks and impact can thus far only be managed by professional investors,” added Maximilian Horster, Managing Director at ISS-Ethix Climate Solutions. “Climetrics will change this historical model by providing a sophisticated, transparent and independent climate rating of funds, based on the best available data, turned into a simple output that can be understood by every financial market participant.”