Reports on the Management of
Climate-Related Opportunities and Risks
Climate change, along with the associated opportunities and risks for the economy and society, has become increasingly prominent in the public consciousness since the Paris Agreement of December 2015. It is now recognised that climate change entails a financial risk that investors cannot afford to ignore. The scientific facts from climate research also leave little room for doubt about the existence of global warming due to greenhouse gas emissions and their potential impact on economic actors. One central issue is that the risks of climate change cannot be diversified, and therefore cannot be completely eliminated from portfolios. However, it is possible to reduce their sensitivity to them, by identifying various impacts of climate risks on asset classes, regions and sectors. Transparent and standardised reporting of climate-related opportunities and risks is essential. PUBLICA therefore bases its reporting on the framework set out by the Task Force on Climate-related Financial Disclosures (TCFD).
Since 2015, the potential impact of climate change on PUBLICA’s assets has been analysed regularly. In view of the breadth and complexity of the potential effects of climate change on investments, PUBLICA has in recent years adopted a series of measures to reduce these risks. For example, the Audit Committee and Investment Committee decided to publish a first report on the climate-related opportunities and risks for the assets in PUBLICA’s portfolio in 2020. The climate compatibility of the equity and corporate bond portfolios is analysed using open-source software from PACTA and climate-specific metrics for equity investments from MSCI. PUBLICA uses its own surveys and measurements for directly held real estate in Switzerland. The reporting is revised every year and expanded when needed.