PI Partnership
GETTING THE GREEN LIGHT ON GREEN INVESTMENT
Edward Lees is co-head of the environ- mental strategies group at BNP Paribas Asset Management
The lessons from the Covid-19 pandemic are wide-ranging. Impor- tantly, we have learned not to wait to confront existential challenges, which informs how we should think about climate change. Over the course of the past year, we have developed new ways of work- ing and have changed many habits. These challenges and changes, however, also bring opportunities.
The climate challenge is arguably the greatest of our generation. The global population is on course to reach 9 billion by 2035, increasing demand for energy, food and water by between 35% and 50%¹. Current ways of meeting these needs are not sustainable and need to change urgently, which will require more co-ordinat- ed efforts. Climate issues are important because they link to so many key themes beyond the obvious environmental events. For example, we need improved solutions now, not tomorrow, so we find more and more overlap with technological innovation. Also, as the world warms biodiversity shrinks, urban populations rise and disease becomes more prevalent, so there is a strong health link. Additionally, much of the world’s poorer populations are more impacted by climate change so, just as with Covid-19, there are important social considerations.
The green rebuild
The good news is as the world looks to recover from Covid-19, glob- al consensus is emerging to also tackle climate change and other environmental challenges. We have come to appreciate our cleaner air and politicians have decided to try to stimulate our economies by greening them. Support for “building back better” is one of the most important investment themes I have seen in my career. US President Joe Biden wants to turn the world’s largest economy into a global clean energy superpower. The Democrats’ long-term stimulus plan includes replacing more than 200,000 polluting and unreliable Postal Service trucks with electric vehicles. The Eu- ropean Union has proposed a detailed roadmap to net zero green- house gas emissions by 2050 – part of a much broader sustainable finance plan. Indian Prime Minister Narendra Modi unveiled a substantial green plan in July 2020 and China pledged in Septem- ber to be carbon neutral by 2060. Korea and Japan also have am- bitious net-zero targets.
Designing an economic system with environmental issues at its heart will not come cheaply. It will require rebuilding much of our
1) Source: Facts and figures from Morgan Stanley, “The Business Case for Susta- inable Investing”, April 28, 2015 and Global Energy & CO2 Status Report 2018, The latest trends in energy and emissions in 2018.
16 March 2021 portfolio institutional roundtable: Responsible investing
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28
