Climate change shaping majority of managers’ investment

Published 22 March 2021

Climate change is a significant factor in the investment policy of close to three-quarters (73 per cent) of investors, according to a new study.

Robeco has reported the finding from its 2021 Global Climate Survey, carried out by CoreData Research.

Almost all 300 institutional and wholesale investors questioned, across Europe, North America and the Asia Pacific, indicated that they already have a formal policy on climate change in place or that climate will be integrated as part of a broader sustainability policy in the near future.

While the proportion of investors that have committed to a net-zero carbons emissions target is relatively small (17 per cent), it’s on an upward trajectory that is expected to rise to more than half of all investors (52 per cent) in the next five years.

The shift is tipped to take place mainly in Europe and North America, where in both regions more than 60 per cent of investors expect to adopt a zero-carbon target within this time frame. The Asia-Pacific region is behind, with only 29 per cent of investors expecting to do the same.

Divesting from carbon-intensive assets is also expected to rise sharply in the next five years, despite 40 per cent of investors not doing so during the last five years. The proportion for those who have not divested is expected to fall to 19 per cent for institutional and 25 per cent for wholesale investors in the coming years.

This survey shows that the vast majority of investors are committed to tackling climate change, which is a promising sign

Gilbert Van Hassel, chief executive of Robeco

But there is demand for more specialised expertise, support and education on climate change, Robeco stated, with 44 per cent of respondents globally viewing the lack of data and reporting as the biggest obstacle to implementing decarbonisation.

The percentage is higher in Europe (58 per cent), while in the APAC, the shortage of low-carbon investment strategies is the largest concern (54 per cent) and North America sees the lack of internal expertise on decarbonisation as the biggest challenge (45 per cent).

Gilbert Van Hassel, chief executive of Robeco commented moving to a low-carbon economy “needs a global effort, with governments, regulators, the corporate sector and individuals all playing their part”.

“This survey shows that the vast majority of investors are committed to tackling climate change, which is a promising sign,” Mr Van Hassel said.

“Yet it has also revealed a substantial knowledge gap when it comes to fully understanding these major issues, with many investors not knowing where to start or how to make a difference. The time to act really is now.”

This article was originally posted in Investor Daily

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