The CFA UK Climate Change Content Working Group brings you a new podcast series focused on the challenges, risks and opportunities of climate change.
The CFA UK Climate Change Content Working Group brings you a new podcast series focused on the challenges, risks and opportunities of climate change.
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Record date: 22 July 2021
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As an investment professional it’s important to gain an understanding of what is meant when talking about climate change and the benefits of shifting existing behaviours. In this podcast explores the basics to take a high-level view of the climate science and what it means for the industry as a whole.
Climate models, whilst varied, are all pointing in the same direction… a global climate that is more volatile and unpredictable that will negatively influence the human race. The Paris Agreement sets out the foundations to tackle this, with many individuals, companies and governments asking how they can achieve net-zero by 2050 or sooner.
Record date: 26 February 2021
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Whilst there is a lot of focus on mobilising climate finance in the direction of the green economy, a shortage of concrete data and definitions are causing a lack of awareness around the investment opportunities available. For years, green was loosely defined, based on concepts rather than a specific industrial system. This is where Lee Clements and FTSE Russell step in.
Through the Green Revenues 2.0 data model, they have identified more than 3000 global companies that are participating in the green economy, equating to an estimate of $4 trillion worth of market cap or 5-6 percent of all listed global equities. FTSE Russell have developed a structure, measurement methodology and process to help truthfully size the growing green economy.
Client interest has significantly grown, with investors starting to look beyond excluding risk areas such as coal mining or gas, and shifting their attention to growth opportunity areas, for instance renewable energy or electric vehicles. This interest has been further stimulated by regulations similar to the EU Taxonomy.
Record date: 23 February 2021
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Right now, millions of people in the UK regularly experience hunger. Yet tonnes of surplus fresh food is thrown away every day. Mark Curtin and his team at the Felix Project have set out to change this.
The UN Sustainability Development Goals (SDGs) are looking to halve food waste by 2030, with the UK making significant progress. There is a growing awareness, from all types of investors, about the issue of food waste and the business benefits that can be realised when providing solutions to tackle it.
Targeting investments in sustainable food companies and in businesses that can demonstrate innovation in resource efficiency and nutrition. Especially those who invest in technology that assist in reducing waste in their production, monitoring, packaging, storage, harvesting and distribution channels.
In simple terms, waste negatively impacts margins in any business, and reducing this waste will improve profitability and investor returns. What can those working in investment do to support this?
Record date: 23 March 2021
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A recent Professional Investor article, Asset managers still slow on climate change, revealed that a substantial number of asset managers are still struggling to engage with climate change challenges and research conducted by the CFA Institute shows that, of 305 respondents from across the investment industry, only 40% are currently incorporating climate change into the investment process, even though three-quarters of respondents feel that climate change is an important issue for investment management.
2020 - the boom year for ESG
This last year has seen phenomenal growth with ESG investing and there has been a renewed focus on these high-performing strategies. Bernstein estimates that £200bn flowed into ESG strategies in 2020, compared to £100bn being pulled from all active funds. Why was 2020 such a pivotal year for ESG investing?
A combination of factors has contributed to these successes, from the doubling of companies declaring net zero targets, increased regulation (EU Taxonomy, SFDR) and a societal recognition and shift towards environmental issues. On top of this COVID-19 gave ESG an unexpected boost with the UK governments mantra of ‘Building Back Better’ cutting through with the general public and investors alike.
There has been a real wake up call for value investors to engage with ESG issues, to attract and win capital for their businesses and the companies they invest in. For Teahan and his organisation RWC Partners, it is not only about integrating ESG strategies into their portfolios, but it’s about going even further and becoming impact investors.
Record date: 9 April 2021