Investing for a World of Change

Net zero portfolios are not the same thing as achieving net zero in the real economy

A panel of Ninety One’s investment professionals discussed how to measure where a company or country is on its net-zero journey. Here are some highlights.

Oct 21, 2021

30 minutes

A panel of Ninety One’s investment professionals discussed how to measure where a company or country is on its net-zero journey. Here are some highlights.

Fast view

  • It’s not enough to simply say carbon-intensity is an inadequate measure of net-zero transition alignment. Viable alternative metrics need to be developed.
  • It may be three years before such metrics are available industry-wide. In the meantime, some Ninety One teams are assessing transition strategies by asking three key questions of companies:
    • Is your carbon-reduction target ambitious enough?
    • Has it been costed for?
    • Is it possible to measure progress on an annual basis – not necessarily in terms of the carbon footprint, but perhaps in terms of capital expenditure on the transition strategy?
  • Ninety One’s Sovereign Fixed Income team has developed a Net Zero Sovereign Index to define a fair transition pathway for individual countries. The index takes into account each country’s starting position, including its level of wealth, and ability to transition.
  • The index allows investors to measure a country’s progress over time in relation to the fair pathway. The aim is to give the investment team and clients a means of monitoring a country’s net zero policies and actions, and whether it is on the right track.

 

All investments carry the risk of capital loss.

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.

Therese Niklasson
Head of Sustainability​
Peter Eerdmans
Portfolio Manager
Nazmeera Moola
Head of SA Investments

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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