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Massachusetts pension fund says review findings will inform manager-quality evaluations & selection.
The Massachusetts Pension Reserves Investment Management Board (MassPRIM) has completed a review of how active equity managers assess climate-transition risk in high-emitting portfolio companies and incorporate that analysis into their investment decisions. The fund plans to use the findings in its overall evaluation of manager quality and the selection of new active managers.
At a July meeting of its Stewardship and Sustainability Committee, MassPRIM said the review found meaningful differences among managers, with some treating climate-transition risk as a core part of their investment approach while others are still developing their practices.
In response, Ben Cushing, Director of the Sierra Club’s Sustainable Finance Campaign, issued the following statement: “MassPRIM is taking an important step by making climate-transition risk part of how it evaluates investment managers and selects new ones. Pension funds should expect the firms entrusted with workers’ retirement savings to demonstrate that material climate risks are actually informing their investment decisions and practices. The next step is to make those expectations consequential: MassPRIM should follow through in manager selection and ongoing oversight, and make clear that managers that fail to meet them can ultimately face consequences for the mandates they manage.”
