The desire to invest in initiatives to combat climate change is heating up, and advisors can help clients find the investments that match their goals for sustainability, said experts who spoke last week at the SRI Conference in San Diego, led by First Affirmative Financial Network.
“There is a sense of urgency now that there wasn’t five years ago,” said Molly Betournay, director of social research and shareholder advocacy at Clean Yield Asset Management in Norwich, Vermont.
“It is no longer a ‘something nice I would like to do,’ but now it’s ‘important for my children that I need to do today – and quickly’ -- which is great, because we’re seeing more assets flow into this,” she said.
Investors are also demanding more evidence of actual outcomes in combating climate change, Betournay said.
On its website, Clean Yield Asset Management says that it is active in efforts to press corporate users of palm oil to source that commodity sustainably and responsibly, due to the huge pressure that palm oil cultivation exerts on Southeast Asian rainforests and their inhabitants.
There is also more engagement from corporates, said Chris Davis, senior director of the Ceres Investor Network on Climate Risk and Sustainability in Boston, which comprises 240 institutional investors that are working to advance sustainable-investment practices, corporate-engagement strategies and policy solutions “to build an equitable, sustainable global economy and planet.”
Blackrock, SGA and Vanguard have put out policy statements to combat climate change, there have been successful proxy votes at companies such as ExxonMobil to disclose more about how climate change affects their organizations, and the Ceres Investor Network has doubled in size, Davis said.
“Blackrock was hoping to raise $1 billion in a [climate] fund but instead raised $1.6 billion,” he said.
“Sustainability leads to innovation,” said Emily Kreps, head of investor initiatives, North America at the nonprofit CDP. “Companies not only are embracing climate change, but some are capitalizing on it, including ConocoPhillips, which now has a chief innovation officer.”
Formerly the Carbon Disclosure Project, the U.K.-based CDP runs the global disclosure system that allows companies, cities, states and regions to measure and manage their environmental impact.
There is also a growth in investment products and opportunities, including green bonds and other capital initiatives led by local governments, to make cities “adaptable and resilient to climate change,” Kreps said.
“Cities such as San Diego recognize that there are actual financial risks tied to climate risks, and they are now asking, what is my responsibility?” she said.
This story is part of a 30-30 series on navigating the growing world of choices for client portfolios.