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

Source: Robeco Global Climate Survey 2024

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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.

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.

Source: WRI

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.

Source: IPCC report 2023

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.

Source: IPCC report 2023

We’re not on track to limit global warming despite having the tools and know-how

We are not on track in tackling global warming, despite better efforts to combat it with net zero 2050 implementation plans. That’s the key message from the 2023 UN Intergovernmental Panel on Climate Change (IPCC) report.

“Human activities, principally through emissions of greenhouse gases, have unequivocally caused global warming, with global surface temperature reaching 1.1°C above 1850–1900 in 2011–2020,” the report says.

“Global greenhouse gas emissions have continued to increase, with unequal historical and ongoing contributions arising from unsustainable energy use, land use and land-use change, lifestyles and patterns of consumption and production across regions, between and within countries, and among individuals.”

“Global greenhouse gas emissions in 2030 implied by nationally determined contributions (NDCs) announced by October 2021 make it likely that warming will exceed 1.5°C during the 21st century, and make it harder to limit warming below 2°C.”