14/06/2022 |

ASCOR Project Publishes 12 Month Progress Update

Today the ASCOR – Assessing Sovereign Climate-related Opportunities and Risks - Project published a 12-month progress update. View this here. 

The project is an international collaboration of investor networks, asset owners and asset managers, representing over $5 trillion AUM.

Since commencing in June 2021, the project team has made significant progress in developing the overall framework for the ASCOR tool and has started to identify the indicators that might form part of the framework. To date, the project has completed its first two stages: project participant interviews and establishing investor expectations.

ASCOR will allow investors to assess governments’ climate-related commitments, their policy frameworks (including carbon pricing, energy subsidies, the phase-out of combustion vehicles, deforestation and land use policies) and the actions they are taking to ensure that the benefits of the low carbon transition and of adaptation are shared amongst their citizens.

ASCOR will not be scoring countries, nor giving investment advice or direction – it is a tool to enhance investors’ decision-making capabilities and to support investors working towards net zero goals.

Stage 3 of the project is expected to be completed by Q4 2022, at which point the project will have identified an initial set of metrics and indicators that can be used. This work is being taken forward in three areas: emissions pathways alignment, climate mitigation and adaptation policies and funding needs for mitigation and adaptation.

Claudia Gollmeier, Chair, PRI Sovereign Debt Advisory Committee and Managing Director, Singapore, Colchester Global Investors said:“The work that the PRI initiated with its sovereign debt advisory committee flagged the need for a tool like the ASCOR project to enable investors to move from ‘why’ to ‘how’ to incorporate climate change in their investment decisions. We are pleased to see such a tool now being developed, allowing investors to frame climate change in a more structured way.”

Victoria Barron, ASCOR Chair and Head of Sustainable Investment, BTPS said: “For institutional investors wanting to manage their climate risk and achieve net zero goals, good quality analysis on all asset classes is a must.

While significant progress has been made, one asset class which remains a blind spot is sovereign debt which, for many institutional investors, can form a large part of their portfolios.

The ASCOR project will, for the first time, create a way for investors to assess their sovereign debt exposure to these risks and opportunities and support engagement with international policy makers to drive net zero action.

We are very mindful of the north/south divide – in terms of the need for capital, and in terms of responsibilities for historic and for future emissions - and we want to ensure issues of justice and fairness are fairly reflected within the ASCOR tool.”

Adam Matthews, Chief Responsible Investment Officer, The Church of England Pensions Board, and ASCOR Vice-Chair said:“This tool has to be practical and fair. We need to ensure that investors understand climate-related risks and opportunities and how well these are being managed by governments. From that analysis, we can then understand what role we can play in supporting the transition in key economies.”