Planetary Pulse: Targeting effectiveness

Asset owners weigh risks and opportunities of investing for an inclusive energy transition.

Are asset owners moving from decarbonising their portfolios to reducing emissions?

Planetary Pulse reveals the findings from new primary research into real-world impact and transition finance. It is based on a survey of 300 senior professionals at asset owners and advisors around the world, including pension funds, insurers, endowments, foundations, central banks, sovereign wealth funds and consultants.

Planetary Pulse visualised

Planetary Pulse Data Viz
2023 regional highlights

Africa highlights

A plurality of Africa-based respondents favours active engagement (45%) and the adoption of climate-related themes (45%). These results are relatively stable compared to 2022 (at 44% and 41%, respectively). Although a high proportion (66%) have over one-quarter of their AUM invested in portfolios with climate-related instructions or objectives, African respondents are the least likely (28% vs 41% across regions) to state that financial institutions have a responsibility to fund the decarbonisation of high emitters in emerging markets.

A plurality currently sets targets (mainly emissions reduction) at whole-portfolio (45%) or asset-class level (45%) and, against the global trend, are planning to continue setting targets at asset-class level (48%). When it comes to frameworks, Africa is the only region where the Task Force on Climate-Related Financial Disclosures (TCFD) is most closely followed (55%). Interestingly, African respondents are most sceptical about the efficacy of frameworks, with 38% agreeing that using established climate-related target-setting frameworks prevents their investments from making a real-world impact on emissions.

The totality of African respondents consider transition finance to contribute strongly to lowering real-world emissions, and 75% say the same about negative screening. A strong disconnect is found here, as transition finance is implemented by a meagre 7%, although negative screening seems more popular, at 41%.

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FT Longitude research paid for by Ninety One.

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