Common ground

There is no lack of willingness among investors in real assets to play their part in helping countries reach net zero by 2050. But much needs to change – and quickly, as Laurence Monnier explains.

Equity markets are slow to price in the implications of change. This creates opportunities for dynamic, style-agnostic investors to take advantage, argue Caroline Galligan and David Cumming.

Recent events have highlighted the importance of the environmental, social and governance characteristics of real asset investments – not only as part of COVID-19 recovery programmes, but also as a way of futureproofing portfolios.

Once dismissed as a virtuous endeavour that compromised investment returns, the ability to gain a more holistic view of risk by considering environmental, social and governance factors is increasingly appreciated by investors. We assess the evolution of ESG across asset classes, as well as its role as a risk mitigator and opportunity spotter.

COVID-19 has led to a new appreciation of the importance of healthcare in ensuring all members of society thrive. So where should investors be looking to find resilience in an industry facing enormous change?

With annual general meetings now taking place virtually, shareholders, employees and suppliers have had to adjust to lockdowns. While some of the immediate impacts will be phased out with the opening of the economy, stewardship priorities and corporate values may change forever.

Mirza Baig explains why far-off commitments on climate change by energy companies and their lenders are no longer enough, and why COVID-19 has catalysed rather than derailed investor engagement on the issue.

COVID-19 has thrown new light on the interdependencies in human and natural ecosystems, and the vulnerabilities of a closely networked world. Aviva Investors’ responsible investment specialists ask whether this will prove a turning point for environmental, social and governance issues.

More than 40 years since a senior NASA scientist told US Congress of concerns about human activities disrupting the climate, experts are warning of an impending climate catastrophe and the financial sector is wrestling with the implications.

As active investors step up their engagement efforts on the climate crisis, discussions need to be at the CEO rather than board level, argues David Cumming.

Psychological barriers can prevent people from acting to avert the climate threat, even when they recognise the problem. So how can we best engage individuals, companies and communities in the quest for solutions?

Until recently, many investors made light of dire warnings of the risks posed by assets becoming “stranded” by climate change. However, as the threat becomes reality, fears are mounting that whole industries could be wiped out.