Recent research by the Thinking Ahead Institute shows that the world’s largest asset owners have to direct capital in a sustainable way, making a significantly positive impact on issues including climate change.
The Asset Owner 100 (AO100) – the world’s 100 biggest asset owners – account for $19 trillion, up 1.7% from last year, according to the institute. Roger Urwin, global head of content, said: “The major investment markets failed to make progress in 2018, but these funds in many cases were able to avoid losing ground against their longer-term targets by sensible diversification, in particular into private markets.”
The 100 largest asset owners are responsible for more than 35% of all global asset owner capital. Of these, there are several self-declared universal owners that are large-scale, long-term and leadership-minded funds that own a slice of the whole world economy, Urwin noted. “This makes them pursue an influential role in safeguarding the financial system and contributing positively to certain big societal issues such as climate change.”
During 2018 there were a number of sustainability initiatives led by universal owner funds that involved “doing good while doing well”. “This marks the start of a movement in which funds support societally beneficial initiatives that are consistent with financially sound fiduciary principles,” Urwin said.