Mercer launches climate change solution for institutional investors

HR and wealth management consultancy Mercer has launched a new offering to support institutional investors with reaching net zero carbon emissions goals.

The UN’s Paris Agreement aims to keep the increase in global average temperature increase to only 1.5 degrees Celsius (2.7 °F) above pre-industrial levels in order to mitigate the impacts of climate change. Reaching this lofty goal will require colossal multinational collective action and political resolve – which some analysts deem practically unattainable – but it’s probably worth the old “college try,” nonetheless.

While governments can pursue policy goals via carbon taxes and consumer incentives, investments via national pension plans and endowments provide another avenue to drive carbon emission reduction. That could mean funneling more investments to green energy and away from oil & gas, for example.

Mercer aims to help institutional investors hammer out coherent strategy and portfolios towards net zero emissions by 2050 and a 45% emissions reduction by 2030 – which is required for the 1.5C goal. The new Analytics for Climate Transition (ACT) solution offers research, analytics, and advice to help investors on their path to responsible investment.

“Many investors are not yet equipped to invest in a decarbonizing economy, and some don’t know where to start. Our analytics and advice will help investors transition their portfolios to take on the challenges of managing climate risk, in their endeavor to meet return objectives while staying on target for a net-zero outcome,” said Helga Birgden, global business leader, responsible investment, Mercer.

The ACT solution will help investors assess the companies they are invested in, set portfolio investment baselines, assess opportunities, establish targets, and create implementation plans.

ACT is a company-wide collaboration spanning the research, advice, and investment solutions practices within Mercer’s investment business. Mercer’s investment business has more than 1,300 global staff and 181 dedicated research analysts, with $15 trillion in assets under advisement as of June 30, 2019.

“Importantly, when working with clients to position their portfolios for transition we leverage our global investment research, our capabilities and our knowledge,” said Jillian Reid, senior responsible investment specialist, Mercer.

Mercer’s responsible investment team helps clients integrate environmental, social, and corporate governance (ESG) factors into their investment approaches. This could include allocating money to impact investments in renewable energy, water, and social housing, and screening out sectors or companies deemed irresponsible to profit from.