A recent report commissioned by the WWF-World Wide Fund For Nature stated that the greenhouse gas (GHG) emissions of 2,380 companies invested in by 118 equity funds in the United Kingdom exceeds 10 billion tons globally per year. The report, analysed by Trucost and Mercer, found that since the funds analyzed own approximately 1.4% of the total market capitalization of these companies, their ownership responsibilities amount to about 134 million tons of carbon dioxide-equivalent (CO2-e) emissions annually, or 22% of total UK GHG emissions.

If, however, the social cost of carbon outlined in the Stern Review on the Economics of Climate Change is applied, then the $92 per ton of CO2-e paid by the portfolio companies would equal $12.4 billion, or 3.2% of revenue. The Stern report defines social costs as "the cost of impacts associated with an additional unit of greenhouse gas emissions."

Despite the exposure to the costs of climate risk detailed in the report, interviews by Mercer found that fund managers are not yet actively managing carbon risks in their investments. This is so despite the emergence of GHG regulation in most major economies, as well as the availability of standardized data to calculate relative exposure to carbon costs in financial analysis.

The report provides recommendations for pension funds and fund managers to take, in order to take advantage of opportunities to address carbon risks.