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Gauging the Exposure to Transition Risks of Colombian Insurers’ Investment Portfolios

Report Emerging markets PACTA Insurance

This study presents the results of a climate scenario analysis of insurers’ investment portfolios, carried out by 2° Investing Initiative and FASECOLDA, the Colombian Insurers Federation.

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Key Findings

1

Colombian insurers are significantly exposed to transition-relevant sectors, which cover up to 46% of the AuM of the listed equity and corporate bond portfolios

2

Overall, the scenario analysis results are relatively positive: for example, results for the oil & gas, hydropower, and gas-based power of the corporate bond portfolio are compatible with a 2°C scenario

3

However, the insurers’ portfolios still face potential exposure to risks arising from a disruptive transition that will need to be mitigated, due to their investments in oil, coal-based power, and certain auto companies

The results shed light on the extent to which insurers’ financial portfolios are exposed to transition risks arising from a disruptive transition, as well as identifying potential avenues for risk mitigation.

This is the first exercise of its kind in Latin America and the second in the world with an industry association.

About our funders: This report has received funding from the International Climate Initiative of the German Ministry of Environment and the Inter-American Development Bank.

 

Independent, non-profit think tank working to align the financial sector with international climate goals.

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2DII today announced it is transferring stewardship of the Paris Agreement Capital Transition Assessment (PACTA) to RMI, formerly Rocky Mountain Institute. PACTA measures financial portfolios' alignment with various climate scenarios, including those consistent with the Paris Agreement. Under RMI’s stewardship, PACTA will remain a free, independent, open-source methodology and tool, and will continue to provide the financial and supervisory community with forward-looking, science-based scenario analysis to help users make climate-aligned financing decisions. RMI will invest in scaling up PACTA’s usability and applicability in day-to-day investment decisions as well as reporting requirements.

Access the full press release here: https://2degrees-investing.org/2-investing-initiative-transfers-stewardship-of-pacta-to-rmi/In the coming weeks, we will update this website with additional information. For now, please note that all contact information remains unchanged.