EUROPE - Pension funds can make money from climate change whether or not man acts to curb its effects, according to a leading sustainability investor.

In an IPE webcast yesterday, Reto Ringger, founder and chief executive officer of Zurich-based Sustainability Asset Management (SAM), distinguished between the ‘ethical' screening of particular sectors and a more holistic approach that focuses on corporate governance as much as carbon risk management.

In the energy sector, for example, SAM will not invest in companies with more than 25% of revenue from nuclear. Ringger explained that the cap was due to political risks.

He emphasised that SAM saw great opportunities in better energy efficiency, not just alternative fuel sources. "This will be a century of coal," he reminded listeners.

On water, Ringger noted that the increasing urbanisation of Asia would put more of a strain on water supplies. Five of Pakistan's biggest cities, for example, lie on the river Indus and rely on its flooding to maintain supplies.

More than half of China's population drinks contaminated water, according to Ringger, although he also noted that half of London's waterpipes are more than 100 years old and that New York City still uses wooden conduits.

SAM's Water Fund has returned more than 70% since the start of 2006.