Fundamental Active Equities: New Drivers & New Approaches for Climate-Related Investing
- As COP26 approaches, a series of regulatory and economic drivers are emerging which have the potential to dramatically reshape equity investing.
- Climate transition planning and competency will become key areas of differentiation for companies.
- We see promising opportunities in both Climate Transition and Climate Opportunity Strategies.
As we approach November’s United Nations Climate Change Conference (COP26) we are seeing the emergence of new, and potentially dramatic, climate-related investment drivers which will shape equity portfolio investing for many years to come.
Moreover, a major new report (AR6) by the UN Intergovernmental Panel on Climate Change (IPCC) will only serve to strengthen policymakers’ drive to channel financial market capital into faster and smarter climate solutions.
The new climate-related drivers have both regulatory and macro-economic dimensions. Regulatory factors may set the transition path to net-zero emissions while fiscal policies, which are expected to be largely tied to sustainability, may help determine the pace and structure of economic growth.