We’ve been covering the state of sustainability sentiment among companies. Overall, it appears positive, as commitment levels are surging and companies are investing more in their programs. However, today’s blog looks at investor sentiment. A recent survey from Robeco checked the pulse of 300 institutional and wholesale investors. Overall investors appear to acknowledge the importance of sustainability and mitigating climate impacts. However, some sentiments may be a bit on the optimistic side.
First off, it appears that investors are expecting climate-related risks to manifest in ways that impact both the value of their assets and their strategic asset allocation. However, despite this, a little less than half are centering their policies around climate change:
- “66% expect physical climate risks to have a moderate or significant impact on asset prices over the next five years.
- 63% expect physical climate risks to have a moderate or significant impact on their organization’s strategic asset allocation over the next five years
- 47% of investors say climate change is at the center of or is a significant factor in their investment policy.”
Next, there’s optimism surrounding growth in renewables. Additionally, a lack of government support for the climate transition isn’t deterring most investors from their organizations’ commitments:
- “75% believe that war in the Middle East, and the disruption it is causing to oil and gas markets, will moderately or significantly accelerate the transition to renewable energy.
- 64% say the slowdown in government support for net-zero goals has not affected their commitment to net zero”
Additionally, there is a curious optimism for AI. There is no substantive evidence that AI will have a positive impact on sustainability. Despite this, most investors believe it will help. Additionally, only 24% acknowledge the negative impacts on water resources.
- “63% think the increasing adoption of AI will have a positive impact on accelerating the development of sustainable infrastructure
- 24% think the increasing adoption of AI will have a negative impact on reducing water consumption and using water resources more efficiently.”
Finally, investors are split down the middle on whether or not we can limit global warming “well below 2°C.” We’ve already blown past the possibility of a 1.5°C scenario. However, opinions are varied on how much worse global temperature rise and climate impacts will get.
- 44% believe the Paris Agreement target of limiting global warming to well below 2°C is not achievable.”
Our members can learn more about sustainability in the financial services sector here.
