Macquarie Bank will launch Australia’s first fund that invests exclusively in companies that have tackled carbon risk.

The fund, announced last month, will be run by the bank’s investment banking group and reflects growing interest in environment and climate risk from the investment community.

The fund will invest in companies it sees as being best able to evolve and adapt in a carbon-constrained environment while maintaining growth.

To help make its investment decisions, Macquarie will license ratings firm ReputTex’s Climate Change Growth Index (CCGI), which prices the impact of carbon risk on a company’s bottom line.

“RepuTex’s analysis shows that climate change and the carbon agenda have had an impact on company earnings globally and that this is likely to become more significant in Australia as the proposed Eemissions Ttrading Sscheme (ETS) is phased in. Furthermore, many of Australia’s largest companies have significant offshore operations that are already being impacted by the pricing of carbon emissions through schemes such as the European ETS,” said Anthony Abraham, executive director at Macquarie.

Comnpanies listed in the CCGI are more advanced at converting risks into opportortunities than others, according to ReputTex.

ReputTex’s head of research, Hugh Grossman, said current market methodologies take a one- dimensional approach to carbon risk by assessing only direct manufacturing exposures. This approach leads to an oversight of significant risk in transactions, as well as missed opportunities.

“The RepuTex model takes a three dimensional approach, quantifying carbon intensity beyond merely production and supply chain phases, instead encompassing the complete life cycle of products and services,”he said.

Meanwhile, the British insurance industry last month launched a new climate change initiative aimed at embedding climate considerations into the business models of insurers, brokers, reinsurers and the Lloyds insurance market, with His Royal Highness the Prince of Wales as patron.

The scheme, called ClimateWise, has produced a set of principles designed to engender more climate-friendly behaviour from individuals and business customers and was developed by a working group consisting of the Association of British Insurers (ABI), His Royal Highnessthe Prince of Wales’s Business and the Environment Programme, and Business in the Community.

Peter Hubbard, a member of the working group and CEO of AXA Insurance, said the initiative shows the insurance industry is committed to action. “The responsibility for addressing global warming rests with us all and will require co-operation and agreement amongst individuals, businesses and countries,” he said.

“It is this spirit of co-operation that has led us to agree the ClimateWise principles and to take the lead in raising this issue. ClimateWise demonstrates the importance this industry attaches to this challenge. The principles set a framework for us taking up this exciting challenge of changing behaviour, raising awareness and encouraging new ways of working.”

ABI chairman Stephen Haddrill added that the principles will build on existing action.

“The insurance industry ensures we are all better equipped to deal with our changing climate,” he said. “Uniquely in the UK we protect people from the consequences of flooding. By assessing the rising financial costs of extreme weather we are helping society make the right decisions for the future. But we need to do more. The principles will enable us to do so by encouraging greater climate-friendly behaviour among our customers, through our investment strategy and risk analysis.”