GLOBAL - Climate change negotiations between the independent Asset Owners Disclosure Project (AODP) and global investor groups have broken down.

AODP chair John Hewson said: "Given the magnitude and urgency of the climate challenge, this rejection by the investor groups is disappointing and dangerous from an industry that should be much more transparent and accountable to its members."

AODP presented proposals to industry groups in a London summit in July to create an industry supported by an independent disclosure and ratings framework that would encourage debate and best practice on how asset owners manage climate risk in the medium and long-term interests of people's retirement savings.

They included the European Institutional Investors Group on Climate Change (IIGCC), the US-based Investor Network on Climate Risk (INCR) and the Investor Group on Climate Change (IGCC) Australia/New Zealand.

Hewson said it was time for these climate investor groups to "walk the talk" within their own industry, as, despite some useful advocacy, real material disclosure from funds had "hardly moved forward at all".

"How is it other than hypocritical for these groups to demand independent disclosure of the companies they invest in, but when it comes to their own transparency, to want to play by a different set of rules?" he said.

"Also, they cannot continue to be gatekeepers for reluctant funds that may be members of these types of organisations but are actually doing very little to invest more responsibly.

"These are the same groups that have been working with the successful and important Carbon Disclosure Project that seeks independently managed disclosure from companies on similar issues.

"We urge their members individually to now disassociate themselves from this lack of openness, and work with ourselves and civil society to publicly demonstrate who is really acting over climate change and who is not."

Julian Poulter, executive director at the AODP, added: "The tragedy is that, while governments are at best tentatively introducing various schemes to price carbon and to otherwise reduce emissions, these investor groups have a unique opportunity to ensure portfolios are better balanced in a climate risk sense and in the process create a sizable shift in capital to the low carbon economy.

"Such a shift, even just to hedge their portfolio risk, could be enough to help underwrite an adequate global response to climate change."

Hewson said pension and superannuation funds needed to begin by being "absolutely transparent" about how they manage climate risk, and to acknowledge to the carbon intensity of their investments.

"They may have escaped scrutiny over the sub-prime crisis, but we have to ensure they don't remain inactive over an even bigger systemic issue," he said.

The AODP issued disclosure requests to the world's largest 1,000 asset owners in August and will publish its first global index of funds in November.