We can all ‘do our bit’ when it comes to caring for the environment. Recycling more, buying food from sustainable sources and reducing our carbon footprint. We all have a personal choice about where and with whom we spend our money.
But, when it comes to our investments, are the companies we are investing in also playing their part? In the latest Schroders Global Investor Study, results from over 23,000 investors across 32 locations worldwide revealed some interesting insights into investors’ views on how companies behave and who should be responsible for mitigating climate change.
It is likely that the impact of COVID-19 has played its part in how investors responded this year – since the pandemic really start to take its toll, it has been widely acknowledged that a sustainable recovery plan was going to be needed.
Interestingly, the behaviours people deemed to be the most important from a sustainability perspective are also considered the most impactful on returns.
Figure 1: Most important company behaviours vs most positive impact on return
Questions have been asked about what Covid-19 could teach us about tackling climate change. The results show a wide spread of opinion on who needs to take responsibility, with a collaborative approach between all parties thought to be the best chance of making the biggest difference.
Figure 2: Who should be responsible for mitigating climate change?
While the above results show less than half of investors feel investment managers should be responsible for climate change, nearly 60% think they should withdraw from funds in the fossil fuel industry.
Figure 3: What should companies do about those involved in the fossil fuel industry?
Overall, the findings suggest that while investment professionals are not explicitly blamed for carbon emissions levels, they are expected to become more involved in reducing them. However it is also important for investors to understand the credentials of their own investments, to ensure they align to their own values.
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