PERSPECTIVE3-5 min to read

Sustainable Investment Report Q1 2021

Read our latest insights on EU regulation, the US minimum wage debate, a pre-season voting outlook and the commitment we have made as part of the Net Zero Asset Managers Initiative. Our active ownership section showcases how we have been engaging with FTSE 350 companies on their net zero transition plans, banks on fossil fuel financing and auto companies on how they are preparing for a more digital world.

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Sustainable Investment Team

Last year was a transformational year for sustainability and this looks set to continue in 2021.

After a bumper year for flows into sustainable funds in 2020 this trend has continued, as they experienced positive flows in the first two months of this year, according to estimates by JP Morgan based on Lipper data.

In its 2021 update, the World Economic Forum’s annual global risks report highlighted that four of the five most likely risks business leaders identified were environmental. We also expect climate change to take centre stage this year ahead of the delayed COP26, which is scheduled to take place at the beginning of November.

In this report we put the spotlight on environmental issues too, with a number of climate-related articles.

These include a Q&A with Andy Howard, Global Head of Sustainable Investment, on Schroders' founding membership of the Net Zero Asset Managers initiative and how FTSE 350 companies have responded to our Group Chief Executive Peter Harrison’s request to prepare and publish their plans for a decarbonisation of the global economy.

We also look at how the transition to a low-carbon economy is going to impact banks and autos. The former sector, banking, is highly exposed to fossil fuels, an industry facing significant financial, regulatory and reputational risks, while the latter requires a shift in business model towards technology solutions.

Our analysts have engaged with companies in both sectors to better understand their exposure to these risks and opportunities.

Beyond climate, our latest report looks into a number of other key sustainability issues globally.

Meanwhile, the 2020 voting season saw companies switch to virtual annual general meetings (AGMs). Daniel Veazey, Head of Corporate Governance, shares his thoughts on what the 2021 season has in store.
Spoiler alert: virtual AGMs will certainly continue to play a role!

Read the full report here.

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