Sustainable Investment Report Q2

Jessica Ground

Jessica Ground

Global Head of Stewardship

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Climate change a major headwind

Well over a decade ago we identified climate change as a major headwind that all investors would have to navigate over the long term. The complexity of the challenge and the multi dimensional scope means that the historic tools investors have relied on are of little use; but the benefits for those who understood the implications would be substantial. This quarterly update provides insight into how the story is unfolding so far. We discuss how industries ranging from fashion, to aviation, to waste, will be transformed, creating new winners and losers.

Engagement an important piece of the puzzle

We believe that engagement and improved corporate reporting on ESG issues, including climate change, is another important piece of the puzzle.

Multi-Asset Investing and ESG integration

Finally, given the long term structural nature of climate change, it is important that investors don’t just consider the impacts on a company or sector level, although as we have demonstrated with tools like Carbon Value at Risk, these can be substantial. In the second of our papers of Multi-Asset Investing and ESG integration we stress the importance of asset owners considering climate change impacts when it comes to their strategic asset location decisions, as well as taking a total
portfolio approach to sustainability. We hope that this report goes some way to demonstrate how we are seeking to take a similar total firm approach.

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