Responsible investment group ShareAction has called on investors to sufficiently address corporate air pollution in investment decision-making.
In a new report, A Breath of Fresh Air, ShareAction said that investors have a ‘vital’ role to play in accelerating progress towards cleaner air, adding that while air pollution is one of the most damaging health risks in investment portfolios, it is ‘widely overlooked’ by asset owners and asset managers.
‘A blind eye’
“Air pollution is the leading environmental cause of death, responsible for cutting millions of lives short each year,” commented Justine Holmes, clean air lead at ShareAction. “Yet most companies and their investors have turned a blind eye, not doing nearly enough to improve air quality as communities around the world suffer the consequences.
“At ShareAction, we believe a healthier population drives a healthier economy. Investors need to open their eyes to the risks air pollution presents and acknowledge that protecting people against harmful pollutants goes hand in hand with protecting the long-term value of their investments.”
Compliance costs
As the report notes, given that air pollution is linked to climate change, environmental degradation, and human rights issues, failure to address these risks can lead to unexpected compliance costs, operational disruptions, and litigation.
‘Failure to monitor and manage air pollution can leave investments open to greater risks and undermine transparency and confidence in responsible stewardship,’ it noted.
According to the World Bank, the global economic cost of air pollution is estimated at around $6 trillion per year, as a result of increased healthcare costs, lost productivity and lower workforce participation.
ShareAction has sought to embed air pollution considerations into responsible investment through its Clean Air Initiative, which sits at the heart of the organisations broader Health Dividend approach. In June of last year, investors representing $865 billion in assets issued a statement urging high-emitting companies to act, describing air pollution as both a public health and financial risk. Read more here.
