Getting to Grips with Climate Change

Wednesday 12 April 2023

esg banner
Author: Maha Khan Phillips

For the investment industry, there is significant knowledge to be gained by focusing on climate change.

Last month, the Intergovernmental Panel on Climate Change (IPCC), made up of the world’s leading climate scientists, issued a ‘final warning’ on the environment. The sobering six assessment report was referred to as a clarion call by UN secretary general, António Guterres. It’s now or never, he summarised.

Nicholas Blain, Chief Executive of Quartic, believes that it is crucial for the investment industry to become educated about climate change. “The report makes it clear that we are reaching a tipping point. Humanity is not yet doomed, but every time the temperature goes up, we’re losing part of the ecosystem. There are countries that are basically on the verge of extinction,” he says. 

Quartic is one of the training providers and partners supporting CFA UK’s Certificate in Climate & Investing (CCI), launched last year to help the investment industry get to grips with climate change issues, and to support individuals who want to further their careers in the field, as capital markets play an increasing role in the transition to a low carbon economy. 

Now in its second iteration, the CCI is a Level 4 examination which looks at key issues such as how to invest in net-zero strategies and technologies, how to integrate climate change considerations into the investment process, how to measure and report on climate risks, and how to develop more resilient supply chains. It offers practical knowledge and skills that can support professionals as they build on their sustainable journeys. 

Interest in studying the CCI has come from a variety of different types of professionals, according to Blain. “It’s very broad in terms of what people are doing, whether they are investors, analysts, regulators, or one of the multitudes of climate advisors out there. We’ve had bookings from science organisations as well as finance organisations. The exam, young as it is, is known to be rigorous. It’s a tough exam, it’s a challenge and there is a lot of information to be gained. Having the CCI on your CV demonstrates to the world that you have studied climate change in quite a bit of depth.”

It also helps practitioners think about how to move the needle on climate change, he believes. “Every investment decision we make can have an impact. It’s not a matter of one person buying shares and one selling and neither having an impact on the issuing company. Once you get a polluting company to realise that they cannot raise capital anymore, that their companies will be excluded from portfolios and that their valuations are going down, then a real impact can be made.”

The Era of Greenwashing

Moreover, with rising concerns around greenwashing, understanding the context around ESG and climate change has never been more important, he suggests. “There needs to be accountability, whether it is how a company is operating, purchasing, selling, or emitting. In the future I would like to think that just as we have a financial audit, there will be a climate or emissions audit as well. But that only happens when we have a proper ability to standardise and compile useful data. Until everyone is dealing with the same standards, there will be immense uncertainty.”

Bain also highlights the fast moving nature of the field. “We have rapidly evolving scenarios, and rapidly evolving regulations. From a candidate point of view, there are a load of different organisations being mentioned in lots of different ways. As a training firm we’ve tried to explore and put a better description on each organisation and look at what they are each trying to achieve. They all have their different functions, but many of them work together in some respects.”

You can find out more about the CFA UK Certificate in Climate & Investing

climate banner


Related Articles

Jul 2023 » ESG

Can asset owners save the world from a biodiversity crisis?

Jul 2023 » ESG

Navigating the race up the renewables S curve

Mar 2023 » ESG

Voluntary carbon markets are facing a credibility crisis

Mar 2023 » ESG

Is climate investing too subjective?