ESG | Feature
pared to renewable industry. It has to change,” Czupryna says. More private capital invested in cleaner energies could also help. Czupryna adds that last year the amount invested in renew- able energy fell after a strong 2017. Yet it appears that this is not due to a lack of appetite.
It is not a lack of private capital targeting greener technologies that is the problem, Barron believes. “It is a lack of projects at the appropriate risk level. As an active equity investor there are a limited amount of investments that we can make. “Therefore asset owners have to empower asset managers to directly invest in smaller companies and smaller projects, unless they take on private equity exposure and do something a little riskier,” she adds.
HEADLINE NEWS Part of the reason why Barron says there is more capital looking for a home than there are suitable investments available is because awareness of the issue is growing. “Everyone knows that [climate change] is
happening, and everyone knows that action has to be taken,” she adds. Speeches by David Attenborough, protest- ers gluing themselves to the entrance of the London Stock Exchange, children walking out of school and speeches by Sweden’s most famous teenager have all put the topic in the headlines in the past year. However, Walsh believes that it will take more than people occupying the streets to make a difference. “Another protest on cli- mate change is not going to be the catalyst for broader awareness on the need and the importance of it,” he says. “Protests can, in my opinion, alienate some people, get them frustrated as opposed to achieving some- thing more constructive,” Walsh adds. Real change may have to come from gov- ernments. They, as Czupryna points out, have the levers to induce changes in behav- iour, to reduce subsidises to fossil fuel com- panies, increase investment in cleantech and pass regulation to support a low carbon economy. It appears that we are winning the fight against the damage we are causing our planet. In many parts of the world, and
in many industries, carbon efficiency is improving, Czupryna says, pointing out that today fewer greenhouse gases are being released to generate $1 of growth. “That has been a trend across the world, even in China,” he adds.
This could be the result of intervention by investors and the government rather than protesters blocking roads. “Investors are pushing from the bottom through collabo- ration groups are engaging with compa- nies, while there is pressure from the top in terms of regulation,” Charles says. Regulation is evolving. Throughout Europe pension funds are required to disclose how they are including climate-risk into their portfolios, yet Sasarean believes that more needs to be done. “A lot of decision-makers at the top are waiting for one-big piece of regulation to clarify everything and make everybody join. They are waiting for a level playing field,” she says, adding that regula- tors need to take action and not just think about it. If not, it seems that the future looks bleak, partly because of the threat posed by the humble bacon sandwich.
Issue 84 | May–June 2019 | portfolio institutional | 29
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