Climate investing
Urgency
Climate change is the biggest challenge facing humanity. The world is not on track to limit global warming to 1.5°C by the end of this century, leaving the planet vulnerable to ever more extreme weather conditions and catastrophic loss of biodiversity. The human and economic consequences are incalculable. We can’t leave saving the planet to future generations: we must act now.
77%
of global investors see climate change as a key theme in their portfolios by 2025-2026
Climate change has become increasingly important to investors’ investment policies, and this is set to continue. In our 2024 Global Climate Survey, 77% of all investors surveyed said they expected the issue to be central to, or a significant part of, their investment policy in the years up to 2026, up from 62% making such a commitment today.
The survey shows that Asia-Pacific investors have overtaken their counterparts in Europe in making it a priority in 2024, with 79% now doing so. Europe is projected to gain back the baton in two years’ time, with 89% forecasting that it will be central to investment strategy.
Globally, the average figures took a slight knock due to declining interest in North America, following a backlash against ESG investing amid the energy crisis of 2022-2023 in which fossil fuel use rose. Enthusiasm there, though, it set to rise again over the coming two years to more than half of North American investors.
Climate change is increasingly central to investment policy
The future of humanity and indeed, all life on earth, now depends on us
Climate change is an increasingly tangible subject, especially if you are living at the sharp end of it. In the past few years alone we’ve seen uncontrollable wildfires in Australia, severe hurricanes in the US, and flooding all over the world. More than three billion people now live in areas that are “highly vulnerable” to climate breakdown, and half of the global population now experiences severe water scarcity for at least part of the year, according to the IPCC. These trends are set to continue to create refugees and drive displacement across coastal regions and in the South Pacific.
The issue has brought some memorable quotes from those who have dedicated part of or their entire life to try to combat it.
Take Sir David Attenborough, for example. The naturalist and broadcaster has dedicated his working career to highlighting ‘Life on Earth’ (as his seminal work suggests) and all of nature’s incredible beauty and variety. His moving documentary, ‘A Life on our Planet’, outlines how humans have caused immense destruction to life on earth. It produced a memorable warning to humankind:
“Never before have we had such an awareness of what we are doing to the planet, and never before have we had the power to do something about that… The future of humanity and indeed, all life on earth, now depends on us.”
With virtually all the hottest years on record occurring in the 21st century, the effects of climate change are now impossible for anyone to ignore. As former US President Barack Obama said:
“We are the first generation to feel the effect of climate change and the last generation who can do something about it.”
The concept of Earth being our only home, and one which we must therefore save at all costs, was neatly put by French President Emmanuel Macron, who said:
“By polluting the oceans, not mitigating CO₂ emissions and destroying our biodiversity, we are killing our planet. Let us face it, there is no planet B.”
The United Nations’ response to the report of its climate panel was unequivocal. In 2021, UN secretary general, António Guterres said the then latest IPCC report warning that the world was nowhere near meeting temperature goals was “code red for humanity,… the alarm bells are deafening’’. In the wake of the 2023 update, he said:
“The IPCC report is a clarion call to massively fast-track climate efforts by every country and every sector and on every timeframe. Our world needs climate action on all fronts: everything, everywhere, all at once.”
At Robeco, we believe we are also part of the solution by investing in companies that make a difference. And as our CEO Karin van Baardwijk makes clear, this is our top priority:
"We have to recognize that the effects of climate change are also top-of-mind for us all, not just as investors but as citizens too. We know that the low-carbon transition is disruptive with impact on companies that can’t keep up. However, at the same time, it’s providing opportunities for those that can."
Climate investing is more than just the next big thing
Lucian Peppelenbos (Climate Strategist) and Carola van Lamoen (Head of Sustainable Investing) look at climate change and climate investing from all angles. Listen to the trailer or to the full 25-minute podcast.
The charts that tell it all
This chart from the World Resources Institute using data from the IPCC 2023 report makes for sober reading. Global warming is causing records to be broken every single day, and it will only get worse while emissions are still rising.
These two charts show how much damage has been done over the last two centuries. While the industrial period effectively began with the advent of steam power in the 1780s, reliable data only goes back to 1850, which is now used for analysis.
The first chart shows how global surface temperatures have increased to at least 1.1 degrees above pre-industrial levels, creating the warmest multi-century period in more than 100,000 years.
NASA’s own research puts the level of global warming even higher, at 1.17 degrees in 2023 than the long-term average for the time of year, and up to 1.36 degrees in total since the industrial era.
The second shows how greenhouse gas concentration levels are now at their highest levels since prehistoric times. Since emissions are still rising, these concentrations are expected to increase.
跨政府氣候變化委員會作出警告：儘管人類擁有工具及專業知識，但並未走上限制全球暖化的正確軌道
人類尚未在應對全球暖化方面走上正軌，但我們確實掌握了答案。在正確的領導下，全世界可以避免遭受危險的氣候變化。在剛剛發佈的聯合國氣候科學小組報告中，跨政府氣候變化委員會強調了這個關鍵訊息。
