Investing for a World of Change

Is the UK leading on net zero?

As the host of COP 26, the UK will be expected to set an example on sustainability. Our panel says the UK has a firm foundation of stewardship as it builds a framework for the future.

Oct 21, 2021

39 minutes

As the host of COP 26, the UK will be expected to set an example on sustainability. Our panel says the UK has a firm foundation of stewardship as it builds a framework for the future.

The fast view

  • COP26 is likely to deliver an update on the targets set in Paris five years ago, while also aiming to find solutions for emerging markets.
  • The UK has been a leader in stewardship, but the issues have broadened out. Progress is needed globally on regulation to direct more capital to sustainable businesses and prevent greenwashing.
  • The UK is in a good position to develop its own regulatory agenda, with the notion of double materiality well-established. But too many taxonomies and competing regimes can create complexity. Any new UK regime should align with existing rules.
  • More UK companies are engaging on sustainability. It is important not to be prescriptive – each company will have a different roadmap for making material change.
  • Why do it? Running efficient businesses generate more sustainable returns over time. It gives them certainty of supply and pricing power. Their customers care and they can win real efficiency gains.
  • It’s not just about carbon reduction. Companies need to be environmentally restorative, socially just and economically inclusive.
  • Sustainable investment is moving to bond markets: credit investors don’t have a vote but can be part of the pathway to engage with companies. There has been an explosion in green bond issuance in the UK and Europe.
  • We believe fundamental investors are better placed to analyse the gap between pledges and real substantive change.

 

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No representation is being made that any investment will or is likely to achieve profits or losses similar to those achieved in the past, or that significant losses will be avoided.

This is not a buy, sell or hold recommendation for any particular security.

Nigel Smith
Managing Director of UK Client Group
Therese Niklasson
Head of Sustainability​
Deirdre Cooper
Portfolio Manager

Important Information

This communication is provided for general information only should not be construed as advice.

All the information in is believed to be reliable but may be inaccurate or incomplete. The views are those of the contributor at the time of publication and do not necessary reflect those of Ninety One.

Any opinions stated are honestly held but are not guaranteed and should not be relied upon.

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