- Climate change has caused devastating natural disasters in Pakistan, the US and China
- These highlight the systemic risks to regional economies and global supply chains
- Increasingly investors are concerned with whether their portfolio is on the right side of the green transition
The Perils Of Climate Change
Tara Clee, ESG Analyst, Hargreaves Lansdown:
“There is no doubt that we are in a climate emergency. This year alone has seen apocalyptic flooding in Pakistan leaving one third of the country submerged, a “megadrought” in the Western US thought to be the driest period in 1,200 years, a heatwave in China dubbed the most severe ever recorded in the world, and the devastating impacts of Hurricane Ian in America.
Q3 2022 hedge fund letters, conferences and more
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While these disasters have helped to sharpen focus on the perils of climate change in public consciousness, they have also served to highlight the systemic risks to regional economies and global supply chains, as well as the breadth and depth of impact we may face.
Increasingly investors are concerned with whether their portfolio is on the right side of the green transition. Considering environmental, social and governance (ESG) factors, alongside the usual financial considerations, can be a great way to ensure your investments are aligned to the net zero transition, and able to capitalise on the opportunities that may arise.
But many fund managers go further and implement exclusions, ramp up engagement and, for those who want to be at the forefront of solving the climate crisis, invest with impact – investing in companies that have a quantifiable positive effect on the environment or society, such as those developing low carbon electricity.”
HL's Fund Picks For A Climate-Ready Portfolio
BNY Mellon Sustainable Real Return
The team behind this fund invests in a combination of shares, corporate bonds, government bonds, commodities and cash with the aim to make money in a variety of market conditions.
The fund's sustainable 'red lines' mean companies that violate the UN Global Compact Principles and those incompatible with the aim of limiting global warming to 2°C are not considered for the fund.
It also won't invest in companies that make more than 10% of their revenues from tobacco, alcohol, gambling and several other contentious industries. The team also engages with the companies they invest in on a range of ESG issues.
FP WHEB Sustainability
WHEB believe that investing in and supporting businesses that have a positive impact on people and planet can help bring about a zero carbon and more sustainable economy.
They invest in companies making a positive impact within nine investment themes: four social and five environmental, including cleaner energy, environmental services, and sustainable transport. Companies that have a negative impact on the environment and society are not considered.
