Robeco: Big investor shift on climate change and decarbonization

Robeco: Big investor shift on climate change and decarbonization

Energy Transition
Duurzaam beleggen (3).jpg

Robeco has published a survey on how investors are approaching the opportunities and risks associated with climate change. The survey covers 300 of the world’s largest institutional and wholesale investors in Europe, North America and Asia Pacific, representing a total of around USD 23.4 trillion in assets under management.

Carried out by CoreData Research, Robeco’s ‘2021 Global Climate Survey’ shows climate change is already a significant factor in the investment policy of almost three-quarters (73%) of investors surveyed. Nearly all respondents indicated that they already have a formal policy on climate change in place or that climate will be integrated as part of a broader sustainability policy in the near future.

One of the possible paths to a low-carbon economy is to set net zero carbon emissions targets. While the number of investors that have already set a net zero target is relatively small (17%), it’s on an upward trajectory that is expected to rise to over half of all investors (52%) in the next five years. The shift will take place mainly in Europe and North America, where in both regions more than 60% of investors expect to adopt a zero carbon target within this time frame. The Asia Pacific region is behind, with only 29% of investors expecting to do the same.

There is an increasing awareness among investors of the need for decarbonization and to support the transition away from a dependence on fossil fuels and towards a low-carbon economy. The survey revealed that divesting from carbon-intensive assets will rise sharply in the next five years. And yet, over 40% of investors globally have not divested their carbon-intensive assets over the past five years. This is expected to fall to just 19% for institutional and 25% for wholesale investors in the next five years.

At the same time, there’s a clear demand for more specialized expertise, support and education on climate change, with 44% of respondents globally viewing the lack of data and reporting as the biggest obstacle to implementing decarbonization. That percentage is even higher in Europe (58%). In the Asia Pacific region, the shortage of suitable low-carbon investment strategies is the biggest concern (54%), and North America sees the lack of internal expertise on decarbonization as biggest challenge (45%).

Gilbert Van Hassel, CEO Robeco: “Moving to a low-carbon economy needs a global effort, with governments, regulators, the corporate sector and individuals all playing their part. This survey shows that the vast majority of investors are committed to tackling climate change, which is a promising sign. Yet it has also revealed a substantial knowledge gap when it comes to fully understanding these major issues, with many investors not knowing where to start or how to make a difference. The time to act really is now. As a global leader in sustainable investing, we see it as our duty to share our passion and expertise with those who have yet to fully embrace it, so that together we can rise to one of the greatest challenges facing humanity: the climate crisis.”