The United Nations Conference on Trade and Development (UNCTAD) has released a new scorecard evaluating the sustainability, integration and performance of the world’s top 100 funds.
In a recent announcement of its 2021 findings, UNCTAD said that the top 100 public pension funds and sovereign wealth funds, representing $22 trillion assets under management, 47 had published an ESG or sustainability report, accounting for 36% of global public pension fund assets under management, and 23% of global sovereign wealth fund assets under management.
Some 53 of these funds, or more than half, failed to report on sustainability integration, including funds from both developing and developed economies.
UNCTAD explained that the regional distribution “may point to the regulatory impact on reporting trends as well as corporate practices.”
According to the findings, 81% of the 47 funds studied have a specific strategy on climate or CO2 emissions, whereas just 32% undertake climate risk reporting. Some 70% of funds have set targets around carbon emissions, green investment or asset allocation. The scorecard also revealed 66% monitor and report with specific metrics, while 72% are part of an international climate response initiative.
Overall, the report states that funds performed well in several areas of sustainability integration, including governance, policies, investment strategies, and ESG integration along the investment chain.
However, it is noted that funds performed to a lesser extent in some aspects of governance, monitoring and reporting, and alignment with the Sustainable Development Goals (SDGs).
The report highlights that there is a large variance in reporting, as no widely accepted reporting framework exists for asset owners or managers.