Investec Asset Management has launched a global environmental strategy to address institutional investors’ concerns around climate change.
The strategy is designed to allow investors to explore long-term portfolio options in public companies across the value chain that stand to benefit from decarbonization.
The current energy transition push is a $2.5 trillion growth opportunity says Investec as the world’s power generation seeks to decarbonize.
Investec Asset Management portfolio manager Deirdre Cooper said at the core of the process is a detailed analysis of business carbon value and what products are actively contributing to the reduction of carbon emissions.
“As the world electrifies, solar and wind are set to become the dominant and far more economical power sources, growing from 0.2 per cent of the world’s power generation mix in 2000 to 7 per cent in 2017, and this could grow to 80 per cent by 2050,” she said.
Ms Cooper will run the strategy with Graeme Baker and said that the strategy would capture the companies that were embarking on the decarbonization journey.
“The world has embarked on its third energy transition: a relatively rapid shift in favour of low-carbon energy. Electricity needs to take market share from all other forms of energy, as we electrify transportation and heating,” she said.
The strategy will address climate risk by providing investment to companies participating in decarbonization, redress the balance of under-exposure to enablers of decarbonization and provide a means by which to measure and hedge against carbon risk.
Investec Asset Management's co-chief executive John Green said positive investment was needed to help push people into a more sustainable world.
“With the world now increasingly focused on the question of how to address climate change, we believe that positive investment action must play a more prominent role in facilitating the transition to a lower carbon economy,” he said.
Mr Green said that companies needed to transition to a carbon-free growth model and it was becoming a priority for many.
“Humanity faces an unprecedented challenge: to transition quickly to a carbon-free growth model, ultimately leading to a more sustainable world. Because of this, the case for investing in public companies that tackle climate risk is a mainstream investment priority,” he said.
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