Case Study: Mercer

Mercer assesses the potential financial impact of climate change on our superannuation funds.

We combined our existing capital market forecasting process with findings from our 2015 public report called “Investing in a Time of Climate Change” to develop a tool that assesses the potential impact of multiple climate change scenarios on our portfolios. One of the scenarios considered was one in which global warming is limited to 2 degrees Celsius as envisaged under the Paris Agreement on climate change.

Mercer’s climate change scenario analysis is a world-leading innovation that enables our portfolio management team to develop strategies to manage the climate change risk to which our superannuation investors are exposed. For example, we are considering the inclusion of low carbon investment strategies as a means of mitigating climate risk.


How the team works together

Colleagues from across portfolio management, investment consulting and research teams worked in partnership with Mercer’s Chief Investment Officer and global responsible investments experts to bring the diversity of thought required to develop this solution. We use agile work spaces and web-conferencing to collaborate across locations.

 


Hear from a team member

I’ve learned how wide-spread the implications of various climate change scenarios can be for institutional investor portfolios, as well as the challenges of capturing these diverse impacts quantitatively
— Sophie Bell
Sophie Bell.jpg
 

Sophie Bell, Investment Analyst


Key figures

The analysis provides important information that Mercer can use to influence the behaviour of ASX companies. For example, Mercer has engaged with a number of large Australian mining companies on their climate change strategies. Some of these engagements have resulted in increased climate change commitments from company management.


About Mercer

Number of employees:

Around 1,800 across Mercer Pacific; 14 in Pacific Portfolio Management team as part of larger global portfolio management team 

Locations of offices:

US, UK, Australia, New Zealand, Tokyo, Hong Kong

Key areas of impact your fund focuses on:

Superannuation and Investment Management

Graduate job title, salary range and role requirements:

While Mercer doesn't recruit graduates in portfolio management, we do recruit graduates as Investment Analysts in our broader Institutional Wealth Analyst Team, which provides an excellent training ground for a move into an investment management team. This role requires study towards CFA.

 
Mercer Partner and co-author of "Investing in a time of client change", Alexis Cheang

Mercer Partner and co-author of "Investing in a time of client change", Alexis Cheang