The Climate Custodians

18 Pages Posted: 23 Jun 2016

See all articles by Robert G. Eccles

Robert G. Eccles

University of Oxford - Said Business School

Timothy Youmans

CECP Strategic Investor Initiative; High Meadows Institute; MIT Sloan Family Office Program

Date Written: June 22, 2016

Abstract

Can custody banks become key players in climate change? Custody banks joining the battle against climate change will signal a significant shift in governance ideology for this highly regulated industry so critical to the global financial system. While global custody banks provide the unseen but essential support system that ensures the proper functioning of the capital markets, they have great untapped potential to become change-makers in climate change. This paper expands on our idea of the “Climate Custodians” first presented in the MIT Sloan Management Review within the governance context of the “Statement of Significant Audiences and Materiality (The Statement)” for these subsidiaries of large bank holding companies. By focusing on the Big Three global custody banks — State Street, BNY Mellon, and JPMorgan Chase — we make the case for large custody banks assuming the role of climate custodians. In this role, these banks would report, among other things, a measure of carbon embedded within their institutional clients’ assets under custody to help clients understand the climate risk in their portfolios.

Suggested Citation

Eccles, Robert G. and Youmans, Timothy, The Climate Custodians (June 22, 2016). Harvard Business School General Management Unit Working Paper No. 16-138. Available at SSRN: https://ssrn.com/abstract=2799263 or http://dx.doi.org/10.2139/ssrn.2799263

Robert G. Eccles (Contact Author)

University of Oxford - Said Business School ( email )

Park End Street
Oxford, OX1 1HP
Great Britain

Timothy Youmans

CECP Strategic Investor Initiative ( email )

5 Hanover Square, Suite 2102
New York, NY 10004
United States

High Meadows Institute ( email )

129 Newbury Street
Suite 400
Boston, MA 02116
United States

MIT Sloan Family Office Program ( email )

77 Massachusetts Ave. E62-663
Cambridge, MA 02142
United States

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