Vienna. The corona crisis has thematically pushed the climate crisis to the edge. But not the problem itself. This is shown by a report presented this week: According to preliminary analyzes by the World Weather Organization, 2020 will be one of the three warmest years since records began. In Europe, the average temperature reached a new record high between January and October. At the same time, the deforestation in the Brazilian Amazon – the green lung of the world – is going on. This year, as much primeval forest will disappear as it did twelve years ago.
In times like these, it is not only politicians who are called upon to take the right measures. The financial industry is now also playing a crucial role in the fight against climate change. The industry was brought on board as part of the 2015 Paris Climate Agreement. Back then, investors were encouraged to divert their funds – ideally to where it was good. At the same time, they are supposed to withdraw from fossil fuels in order to put a stop to global warming.
Of course, something like this doesn't happen overnight, but more and more financial market participants have the topic on their agenda – and are increasingly implementing sustainability in their investment processes.
You want to “do the right thing”
The corona crisis could now accelerate this trend, as a survey by the world's largest asset manager, Blackrock, of 425 investors in 27 countries shows. Accordingly, the respondents plan to double their managed assets in sustainable investments over the next five years. From the current average of around 18 percent to 37 percent in 2025. The survey participants who manage at least 25 trillion dollars include corporate and public pension funds, asset managers, insurance companies and private banks.
54 percent of respondents said that sustainable investing has now become a fundamental part of their investment processes. Especially those in the EMEA region, i.e. Europe, the Middle East and Africa. The situation is different in North and South America, where around 40 percent consider sustainability to be very important, while another 40 percent attach no importance to it.
From a global perspective, however, hardly anyone believes that green investments are only a short-term trend – most likely the Americans. In Europe it has become a central part of their strategy for most (86 percent), in the USA only about half act out of conviction. 42 percent believe that a niche, albeit an important one, will be served.
The main motivation for investors to shift funds is to “do the right thing”. Better risk-adjusted performance and the reduction of investment risks landed in second and third place. Customer demand plays a role for 30 percent, reputation risks for a quarter. European investors in particular “see the benefits of sustainability from a societal perspective,” says Blackrock's Mark McCombe. In the USA, on the other hand, “risk management and value development are more important”.
The “poor quality or availability” of relevant data is still a problem for investors. For 53 percent, they represent the “greatest obstacle” to sustainable investments.