ESG focus: the climate emergency and the investment sector


Sustainability Analyst Amarachi Seery Sheds Positive Light on Latest IPCC Report Describes the Hard Reality of the Current State of the Climate

Climate emergency, but the investment industry can make the difference

By Amarachi Seery, Sustainability Analyst, Janus Henderson

Key points to remember:

  • Regulators must play a role in climate change. Europe has already enacted regulations to improve transparency and reduce green laundering in the investment space, which has boosted demand for products that put sustainability at the heart of the investment process.
  • Going net zero is vital and requires the commitment of all companies in all sectors. Carbon neutral certification can be satisfied to provide assurance that a company’s carbon neutral statement is strong and credible.
  • There are high expectations for the next COP26 meeting, where world leaders will discuss meaningful policy change to tackle climate change. We think it’s an opportunity to be part of something big.

The Intergovernmental Panel on Climate Change (IPCC) recently released the first installment of its sixth assessment report, which is grim reading. I encourage everyone to at least read the headlines, which make clear the state of climate emergency we face as a species.

The highly trained scientists involved in Working Group I spared no one’s feelings when they delivered a truth that many of us try to ignore – that climate change is already with us, and it is not. will only get worse if we don’t change the way we do things as a species. . This is evident in the flash floods we have experienced in London, Hubei China, Germany and many other places over the past two months. Wildfires have also devastated parts of the United States, Algeria, Greece, Russia and several other countries. Our colleagues, friends and family are currently affected by climate change. At the time of writing, many Janus Henderson employees in Denver, Colorado are facing air pollution from wildfires for the second year in a row. Some had to limit their time outdoors and suffered from sore throats and difficulty breathing.

As someone who has only worked in sustainability roles my entire career, it saddens me because the IPPC report made it clear that this could be our new standard and we are running out of time to make things right. However, working for sustainability is about being optimistic about those who will tell you that what you are doing is ridiculous. When I first started watching this in 2004, I was ridiculed as a “tree hug” and “sandal bearer” and was told categorically that there would be no more. working for me in the future. Oh, how things have changed.

Reading the full report (which is almost 4000 pages long) is not easy. Although it has been written primarily for policymakers, there are some opportunities that investors can take advantage of.

  1. Regulators must play a role in climate change: The IPCC has clearly targeted policymakers because its experts recognize that the changes needed must be large-scale. Bringing this to the investment world, Europe has seen regulations in the form of the European Union (EU) Regulation on Public Financial Disclosure (SFDR) and the Taxonomy for Sustainable Activities. These regulations force asset managers to standardize disclosure regarding environmental, social and governance (ESG) integration, thereby improving transparency and reducing instances of green laundering (providing misleading information about ESG initiatives). As a result, the desire for products that focus on environmental and social characteristics or aim for sustainable investment (referred to as Article 8 and Article 9 within the EU) has increased considerably.
  1. Becoming Net Zero Carbon is vital: The IPPC report highlighted the scientific reasons why everything will need to become net zero carbon by 2050. It is no easy task. If it was, we would have done it already. A fundamental part of the fight against climate change is that companies around the world maintain a net zero carbon footprint. This can be achieved through a combination of measures, including reducing consumption, purchasing renewable energy or energy offset certificates and, more broadly, carbon credits from certified carbon emission reduction projects. independent. Many organizations seek carbon neutral certification through the CarbonNeutral protocol, which ensures that a company’s carbon neutrality statement is strong and credible. Janus Henderson is proud to be CarbonNeutral® since 2007 *.
  1. Climate change requires collaboration: The crisis we face today is so vast that it cannot be solved by one company. It requires collaboration across the industry and even outside of it. As part of our commitment to responsible investing, Janus Henderson is involved in a wide range of ESG-related initiatives as a member, supporter or in an advisory capacity. Please see the ESG section of our website for more details.

The work on climate change is not finished and the situation looks grim, but we hope it will be surmountable. Scientists in the IPCC working groups think so too, otherwise they wouldn’t continue to write reports or do the science work (mostly on a voluntary basis) if things couldn’t change. There are high expectations for the upcoming United Nations Climate Change Conference (COP26) in Glasgow from October 31 to November 12, 2021, where world leaders will discuss meaningful policy change to tackle climate change. We believe this is an opportunity to be part of something big and to which we are also ready to contribute.

* CarbonNeutral® certification has applied to Janus Henderson Investors since 2017 and to Henderson Global Investors before that date.

This information is issued by Janus Henderson Investors (Australia) Institutional Funds Management Limited (AFSL 444266, ABN 16 165 119 531). The information contained in this document does not in any way constitute advice or an invitation to invest. It is for informational purposes only and may be changed without notice. This information does not claim to be a full statement or description of the markets or securities referred to. Any reference to individual titles does not constitute a recommendation of titles. Past performances are not representative of future performances. The value of an investment and the income from it can go down as well as up and you may not get back the amount you originally invested.

Although Janus Henderson Investors (Australia) Institutional Funds Management Limited believes the information to be correct as of the date of this document, no warranty or representation is made to this effect and no liability can be accepted by Janus Henderson Investors (Australia) Institutional Funds Management Limited to any end user for any action taken on the basis of this information. All opinions and estimates contained in this information are subject to change without notice and are the views of the author at the time of posting. Janus Henderson Investors (Australia) Institutional Funds Management Limited has no obligation to update this information as it is or becomes obsolete or incorrect.

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