Insights

Fundamental Active Equities: Climate Debate and Carbon Pricing

COP26, scheduled to be held from 1 to 12 November 2021, is expected to set the direction on whether ‘hard’ metrics, such as carbon pricing, will dominate environmental risk measures that are adopted in portfolios over the next decade.

Esther Baroudy, CFA

Portfolio Manager

John E Flynn, CFA

Portfolio Manager

Chin-yan Wu, CA

Peter Torok, CFA

March 18, 2021

As the 26th United Nations Climate Change Conference of the Parties (COP26) draws nearer, we expect financial markets to look for indications on how carbon might be priced as well as assess the impact of carbon pricing on corporates and other entities.

Important environmental-related events that may affect market sentiment:

On 10 March, some of the requirements toward the EU Sustainability-Related Financial Disclosures Regulation (SFDR) came due and the scope of the SFDR in future is potentially vast.
COP26 is expected to set the direction on tackling emissions control for the next decade. A US-hosted Climate Summit on 22 April followed by a G7 Summit on 11–13 June may give markets signals regarding what to expect at COP26.

Read Full Commentary

Twitter LinkedIn YouTube SPDR Blog

Singapore: State Street Global Advisors Singapore Limited, 168, Robinson Road, #33-01 Capital Tower, Singapore 068912 (Company Reg. No: 200002719D, regulated by the Monetary Authority of Singapore). T: +65 6826-7555. F: +65 6826-7501.

The information provided does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security/ investment product. It does not take into account any investor's particular investment objectives, strategies, tax status or investment horizon. You should consult your tax and financial advisor. All material has been obtained from sources believed to be reliable. There is no representation or warranty as to the accuracy of the information and State Street Global Advisors Singapore Limited shall have no liability for decisions based on such information.

Any views expressed herein are those of the author(s), are based on available information, and are subject to change without notice. Individual portfolio management teams may hold different views and may make different investment decisions for different clients. There are no guarantees regarding the achievement of investment objectives, target returns, portfolio construction, allocations or measurements such as alpha, tracking error, stock weightings and other information ratios. The views and strategies described may not be suitable for all investors.

All forms of investments carry risks, including the risk of losing all of the invested amount. Such activities may not be suitable for everyone.

Past performance is not necessarily indicative of the future performance. Investment return and principal value will fluctuate, so you may have a gain or loss when investments are sold. Current performance may be higher or lower than that quoted.

The whole or any part of this work may not be reproduced, copied or transmitted or any of its contents disclosed to third parties without SSGA’s express written consent.