Allocating to decarbonisation

The urgent need to address climate change is creating risks and opportunities for investors. Our panel discussed how to allocate to ‘decarbonisation’, the challenge of dealing with incomplete and unreliable data, and the need to improve impact measurement.

Nov 16, 2020

23 minutes

Deirdre Cooper
The urgent need to address climate change is creating risks and opportunities for investors. Our panel discussed how to allocate to ‘decarbonisation’, the challenge of dealing with incomplete and unreliable data, and the need to improve impact measurement.

The fast view

  • With China committing to ‘net-zero’ and the candidate with a strong environmental agenda winning the US presidential race, 2020 could be a tipping point for climate policy.
  • The speed at which climate-related developments are occurring – across policy, technology and consumer trends – is accelerating.
  • Not investing in high-carbon industries will lower the carbon footprint of a portfolio, but more targeted investments are likely needed to make a significant impact.
  • The availability and quality of sustainability data remains a significant challenge for both investors and asset managers. Carbon and ESG data should be viewed as just the starting point to evaluate an investment.
  • Measuring the impact of an investment remains difficult, especially in public markets, and even more so at the portfolio level. But arguably every investment has impact, whether it supports the status quo or pushes towards positive or negative impact. At the very least, it will influence the cost of capital for companies.


General risks:

All investments carry the risk of capital loss.
Deirdre Cooper
Portfolio Manager

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