(Dow Jones) Most of the largest investment managers are not directly factoring climate change into their investment decisions despite increasing awareness of its potential financial impact, according to a report released Wednesday.

Nearly half of the 84 managers who responded to the survey said they "do not consider climate risks at all because they do not believe that climate change is financially "material" to investment decision making," according to Mindy Lubber, president of Ceres, a coalition of investor groups, environmental organizations and investment funds, which released the survey.

The Investor Network on Climate Risk, a network of more than 80 pension funds and other institutional investors, requested the report. Lubber said the results showed a short-sightedness by many managers.

"Climate change creates real financial risk to companies", said Lubber. "It ought to be analyzed and reviewed as such."

Many asset managers who were surveyed said they did not analyze climate risk because clients such as pension funds and institutional investors haven't asked them to. Another factor, according to the report, is that the incentive structures and benchmarks used to evaluate managers are heavily weighted toward short-term performance.

The Securities and Exchange Commission has indicated that it may soon require companies to provide more information about the impact of climate change on their businesses. Many companies already provide at least some of the information voluntarily.

A growing number of investors and regulators want the information for long-term investment decisions, especially because they expect Congress to put a price tag on carbon emissions. The National Association of Insurance Commissioners (NAIC) adopted a mandatory requirement in 2009 that insurance companies with annual premiums of $500 million or more disclose to regulators the financial risks they face from climate change.

The Ceres report recommended that institutional investors push their managers harder to consider the risks and rewards of climate related issues. The California State Teachers' Retirement System (CalSTRS) announced Wednesday that it would ask its active equity managers to provide this analysis. CalSTRS, the nation's second-largest public pension fund, has more than $130 billion in assets under management.

"This report demonstrates there is work to be done for asset manager and institutional investors," said Jack Ehnes, chief executive officer of CalSTRS. He said institutional investors are reevaluating their asset managers and "this is the time to fold this (climate change) into the discussion."

Managers who don't consider climate change also miss out on potential earnings.

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