Institutional Asset Manager 21.05.21

institutional asset manager maddy taylor captioned.jpgInvestment in new fossil fuel projects needs to stop immediately if the world is to reach net zero carbon emissions by 2050, said International Energy Agency this week. This was a radical turnaround by the historically pro-fossil fuel body, which outlined the huge energy overhaul needed to curb climate change in a landmark new report. Among its recommendations: no approvals for new oil and natural gas fields, and huge investment in biogases, hydrogen, and solar power. 

Investors have already been pledging to reduce fossil fuel investments on the path to net zero, with around 70 per cent of global GDP and CO2 emissions now covered by such pledges. This week, supermarket chain Co-op became the latest to promise net zero pensions, joining the likes of Ikea, Ernst & Young, and Oxfam. 

Institutional investors in the Nordics are furthest along in the process of greening their investments, with more than four out of five pension funds already investing in green bonds, according to a new survey by NN Investment Partners

Net zero is also changing the trading landscape. AirCarbon Exchange became the world’s first carbon-negative trading platform this week, after offsetting its emissions from the past three years and this year’s projected emissions.  

Meanwhile, French asset manager BNP Paribas Asset Management is warning that investors risk focusing too narrowly on carbon emissions. Biodiversity loss is an environmental crisis that investors can’t afford to ignore, said the French asset manager, announcing plans to develop reporting standards for companies’ biodiversity impact

“It’s important to understand that climate change is driving nature loss, and nature loss is driving climate change – but very few climate dialogues with companies address biodiversity,” said a manager at BNP Paribas Asset Management on Wednesday. 

Madeleine Taylor
Editor, Institutional Asset Manager


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