Climate change tops global investors’ agenda
Climate change is becoming of fast-growing importance to business decisions being made by many of the world's largest institutional investors, according to a new survey.
22 March 2022Based on research commissioned by asset management company Robeco, three-quarters of the 300 institutional and wholesale investors questioned in Europe, the US and Asia-Pacific rated climate change as central to, or a significant factor in, their investment policies - more than double the 34% in the survey two years ago.
The study, conducted by CoreData Research, involved investors with about $23.7 trillion in assets under management. Almost half of them have already made, or are in the process of making, public commitments to achieving net zero emissions in their investment portfolios by 2050.
The annual 'Climate Survey' report from Robeco found an increasing appetite among investors to divest from oil and gas companies using fossil fuels, with the number expected to more than double from 11% to 22% over in the next two years.
Lucian Peppelenbos, climate strategist at Robeco's Rotterdam HQ, commented: “The survey sheds light on how institutional investors view some of the key issues around climate change, biodiversity, and stewardship.
"While there is uncertainty around these topics, we also know that we must take urgent action. We don’t have the luxury to wait for perfect data or perfect solutions.
"As investors, we need to pull up our sleeves and work our way through it, as we have the means to put money to work where it can make a difference. Being a global leader in sustainable investing, we see it as our duty to share our expertise with others and we hope that this research helps stimulate the investment industry to play a constructive role in combating climate change and loss of nature.”
"Almost three-quarters (70%) of investors are currently implementing thematic investing, with European and Asian-Pacific investors being ahead of North Americans."
Second, the report said, active ownership - including engagement and voting - as a central or significant factor in investment policies had now risen to 73%, up from 54% two years ago.
Robeco added: "Net zero carbon emissions, reducing global waste, halting deforestation and protecting biodiversity are seen as the most crucial environmental engagement themes to focus on in the next two to three years."
The survey also found that investor awareness of biodiversity was rapidly increasing, with 41% of respondents saying it was now a "significant factor" in their investment policies, more than double the total two years ago.
"Implementation, however, still proves to be challenging due to a lack of research data, ratings, and company information on biodiversity, say 50% of investors. Moreover, 43% see a shortage of suitable investment products and strategies as an obstacle to taking account of biodiversity, while 46% mention insufficient demand from end investors."
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The study, conducted by CoreData Research, involved investors with about $23.7 trillion in assets under management. Almost half of them have already made, or are in the process of making, public commitments to achieving net zero emissions in their investment portfolios by 2050.
Will net zero become worldwide for businesses?
However, the research uncovered wide geographical differences with only 11% of North American investors actually committed to net zero, lagging behind the 40% in Europe and 31% in Asia-Pacific.The annual 'Climate Survey' report from Robeco found an increasing appetite among investors to divest from oil and gas companies using fossil fuels, with the number expected to more than double from 11% to 22% over in the next two years.
Lucian Peppelenbos, climate strategist at Robeco's Rotterdam HQ, commented: “The survey sheds light on how institutional investors view some of the key issues around climate change, biodiversity, and stewardship.
"While there is uncertainty around these topics, we also know that we must take urgent action. We don’t have the luxury to wait for perfect data or perfect solutions.
"As investors, we need to pull up our sleeves and work our way through it, as we have the means to put money to work where it can make a difference. Being a global leader in sustainable investing, we see it as our duty to share our expertise with others and we hope that this research helps stimulate the investment industry to play a constructive role in combating climate change and loss of nature.”
Investors are wanting to create a difference to the world
Robeco said that a key finding from the survey was the enhanced drive among investors to achieve a "real-world impact".The company said: "First, this is noticeable in the adoption of thematic investing in sustainability-related themes such as renewable energy or green technology."Almost three-quarters (70%) of investors are currently implementing thematic investing, with European and Asian-Pacific investors being ahead of North Americans."
Second, the report said, active ownership - including engagement and voting - as a central or significant factor in investment policies had now risen to 73%, up from 54% two years ago.
Robeco added: "Net zero carbon emissions, reducing global waste, halting deforestation and protecting biodiversity are seen as the most crucial environmental engagement themes to focus on in the next two to three years."
The survey also found that investor awareness of biodiversity was rapidly increasing, with 41% of respondents saying it was now a "significant factor" in their investment policies, more than double the total two years ago.
"Implementation, however, still proves to be challenging due to a lack of research data, ratings, and company information on biodiversity, say 50% of investors. Moreover, 43% see a shortage of suitable investment products and strategies as an obstacle to taking account of biodiversity, while 46% mention insufficient demand from end investors."
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