Investors are more open to net zero but less savvy on the risks

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October 19 2021
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One report says that nine in 10 investors believe in the reduction of carbon emissions, while a third are willing to put their money on the line for it.

The appetite of investors towards solving the climate crisis continues to deepen.

New data shared in Ninety One’s latest Planetary Pulse report has suggested that as much as 32 per cent of investors are happy with their money being used to reduce carbon emissions regardless of the cost.

Ninety One’s co-portfolio manager for its global environment fund, Deirdre Cooper, said that the climate crisis presents both risks and opportunities, but that this data makes it clear that investors are actively looking to allocate capital in ways that work towards a sustainable future.

“The investment management industry has an integral role to play in tackling the climate crisis in the real economy, and this cannot be met by providing investment capabilities to investors which tilt towards asset-light sectors, moving capital out of emerging regions, or selling assets to less responsible owners and outsourcing,” she said.

All told, nine of 10 surveyed investors expressed a belief that reducing carbon emissions should be encouraged and that they’d be happy for their money to play a part in achieving this objective.

Ninety One’s latest survey also found widespread support for more proactive action, with half of surveyed investors agreeing that asset managers should use their influence to push carbon-heavy companies to reduce their emissions.

The report also suggested the existence of an underlying knowledge gap when it comes to the broader consequences of investing towards net zero.

While four out of five investors said that doing so positively appealed to them, only one in two investors were able to see the negative impacts that a rapid divestment away from carbon-intensive sectors may have on the developing world.

According to Ninety One CEO Hendrik du Toit, “there is an incontrovertible and sobering fact about the drive to net zero — any effort that does not work for the world’s 7.9 billion people, will fail everywhere”.

Mr du Toit said that emerging economies are not responsible for the bulk of emissions to date and that “to really save the planet, we must help emerging markets go green”.

“That means robust carbon markets, debt-for-climate deals, and financing options to speed the transition,” he said.

About the author

Fergus is a journalist for Momentum Media's nestegg and Smart Property Investment. He likes to write about money, markets, how innovation is changing the financial landscape and how younger consumers can achieve their goals in unpredictable times.

About the author

Fergus is a journalist for Momentum Media's nestegg and Smart Property Investment. He likes to write about money, markets, how innovation is changing the financial landscape and how younger consumers can achieve their goals in unpredictable times.

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