Portfolio alignment is a hot topic and key area of focus for the TCFD review and COP26 private finance team. But what is it really telling us and how will it influence investment decisions? This session looked at the unintended consequences of the portfolio alignment metric, and how investors can incorporate forward-looking views into their analysis and how it affects investment decisions.[vc_quotes layout=”accordion” 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Research from Princeton University plots a Blueprint for how the US can achieve net zero emissions in the next decade showing the key is overcoming execution challenges including the infrastructure deployment and the mobilisation of capital and labour.
Poor corporate sustainability disclosure and the absence of global standards is now a systemic risk for investors, said panellists at Sustainability in Practice which included chief governance and compliance officer at Norges Bank, Carine Smith Ihencho.
Mass PRIM is involved in an MIT initiative to improve ESG with better data, ratings and ultimately products. Executive director and CIO, Michael Trotsky, explains how the ambiguity around ESG ratings creates acute challenges for investors trying to achieve both financial and social return.
A joint report by the International Energy Agency and the Centre for Climate Finance & Investment at Imperial College examines the risk and return proposition in energy transitions. Across all portfolios examined, renewable power generated higher total returns relative to fossil fuel.
AP4’s head of alternatives Jenny Askfelt Ruud discusses how the pension fund integrates sustainability in its alternatives portfolio which includes avoiding investments in some sectors in line with its decarbonisation strategy and investing in sustainability themes by finding companies that are driving the transition with new technologies and services.
Scenario analysis shows that the ability of pension funds to pay their pensions will be severely impacted by climate. But a discussion between asset owners at Sustainability in Practice revealed the challenges in the process.
Policy makers response is the next pivotal step in sustainable investmen according to Victor Verberk, CIO fixed income and sustainability at Robeco. He predicts that policy makers reaction will appear via taxes or import tariffs with a “devastating impact” on companies that will create winners and losers.
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