• Atmospheric CO2 /Parts per Million /Annual Averages /Data Source: noaa.gov

  • 1980338.91ppm

  • 1981340.11ppm

  • 1982340.86ppm

  • 1983342.53ppm

  • 1984344.07ppm

  • 1985345.54ppm

  • 1986346.97ppm

  • 1987348.68ppm

  • 1988351.16ppm

  • 1989352.78ppm

  • 1990354.05ppm

  • 1991355.39ppm

  • 1992356.1ppm

  • 1993356.83ppm

  • 1994358.33ppm

  • 1995360.18ppm

  • 1996361.93ppm

  • 1997363.04ppm

  • 1998365.7ppm

  • 1999367.8ppm

  • 2000368.97ppm

  • 2001370.57ppm

  • 2002372.59ppm

  • 2003375.14ppm

  • 2004376.96ppm

  • 2005378.97ppm

  • 2006381.13ppm

  • 2007382.9ppm

  • 2008385.01ppm

  • 2009386.5ppm

  • 2010388.76ppm

  • 2011390.63ppm

  • 2012392.65ppm

  • 2013395.39ppm

  • 2014397.34ppm

  • 2015399.65ppm

  • 2016403.09ppm

  • 2017405.22ppm

  • 2018407.62ppm

  • 2019410.07ppm

  • 2020412.44ppm

  • 2021414.72ppm

  • 2022418.56ppm

The City of London, Europe's largest financial hub. Robeco's annual survey shows European investors lead the way in net zero efforts.
News & Views

Revealed: European asset owners lead global net zero efforts

Investors are increasingly adopting an active ownership approach, with European asset owners leading the way

Climate change remains central to investor strategies over the coming years, as active ownership and particularly biodiversity are rapidly increasing in importance. 

This is leading to a surge in demand for impact funds, with European asset owners leading the pack.

These are the main takeaways from the annual 2023 Robeco Global Climate Survey, which gathered the views of 300 global investors on their approaches to decarbonization, climate change, biodiversity and engagement. 

Carried out by CoreData Research, the influential survey shows that this year a growing group of capital owners have made, or are planning to do so, a public commitment to net zero by 2050, compared to 2022, namely 48% versus 45% last year.

Reshaping portfolios

Implementation and reshaping portfolios are in full swing, many investors indicated, with a vast majority of investors (55%) assessing the impact of their portfolios on carbon emissions. 

However, many investors acknowledge that Scope 3 emissions, or emissions such as business travel and waste disposal, do remain a challenge, as only 20% of investors measure these. 

Also, less than a third have adopted a forward-looking view of investee companies’ emissions pathways, which is critical to investment opportunities, engagement and divestment decisions. 

European investors remain the global leaders in prioritising climate change within investment policy, with 81% saying it is a significant or central factor.

However, the researchers saw the biggest year-on-year increases in APAC, with 73% now embedding climate change in policy, versus 57% in 2021.

North American investors expect climate to gain greater prominence over the next two years, but the trend data suggests that, in reality, uptake has not grown in the region over the last two years. 

"Nevertheless, it is still being prioritised by a majority of investors," according to the report.

"Although climate change is firmly on the investment agenda for the majority of investors in APAC and North America, many have been slow to make public commitments to net zero by 2050, perhaps wary of the pressure this would bring to align portfolios with emission reduction pathways," the researchers wrote.

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On a positive note, there should be more public commitments coming in the next 12 months, with 30% in APAC and 16% in North America reporting that this is in the pipeline. A further 24% in Europe say the same.

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Robeco 2023 Global Climate Survey

Disclosures

Most investors in North America and APAC think better fund disclosure regulations would help address some of the decision-making challenges they face.

There is strong appetite for regulation to classify and verify sustainable investment funds in North America and APAC, which could help to allay greenwashing concerns. 

In Europe, however, the jury is still out on whether the EU SFDR is delivering on its aims.

Overall, investors are moving from aspiration to implementation, but "they need policy-makers to keep course and provide long-term clarity," the report read. 

The sentiment from the survey is that there is continued momentum amongst investors, but they are facing challenging markets and policies > Investors have started the hard job of implementation, and they are determined to reshape portfolios.

Europe

Leading in net zero commitments, Europe leads the way with 37% of investors versus 20% and 19% in the other regions.

Asset owners in Europe also leading on divestment (28%) and on engagement (25%), while a majority (63%) is concerned
about legal and/or political pressure if they do not act on ESG

The energy crisis reinforced 54% of investors in Europe in their net zero conviction, and 43% increased their engagement with oil and gas companies.

The survey found that the main barriers in Europe remain a lack of data, concerns on greenwashing and a lack of standards.

North America

Investors in North America, particularly the United States, have the lowest level of net zero commitment (19%) and they are less likely to divest or engage, but more likely to support policy advocacy.

A majority (61%) of players in this part of the world is concerned about anti-ESG policies in certain locations.

Risk-return considerations are a bigger barrier to portfolio decarbonization in North America (40%) than anywhere else and the main barriers for most North American investors are a lack of data, lack of standards and risk-return considerations.

Asia

It is a slightly different picture in the Asia-Pacific region. Investors there are rapidly catching up on embedding climate change, from 57% to 73% since 2021.

Players in the APAC region are leading on materiality assessment (63%) and forward-looking metrics (35%) but concerns remain both about anti-ESG policies (60%) as well as meeting ESG requirements (57%).

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Investors in the APAC region are rapidly catching up on embedding climate change.

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Robeco 2023 Global Climate Survey

The energy crisis reinforced 60% in their conviction on renewable energy investments, but 59% also reviewed their approach to avoid underperformance.

The main barriers APAC asset owners are struggling with are, again, a lack of data, a shortage of suitable funds, internal expertise and concerns on greenwashing.

Biodiversity

Besides reducing the carbon intensity of their investments, investors are increasingly starting to realise that maintaining biodiversity is a necessity to preserve life and well-being on earth.

In both cases, being an active owner and engaging with investee companies is vital for investors to have a positive real-world impact.

On biodiversity, investors currently face a challenge of implementation. This is because the financial implications of biodiversity loss are rarely measured, making it difficult for investors to take action.

The use of thematic investing and impact investing is one way to address this. Another one is to make use of the UN Sustainable Development Goals that relate to biodiversity, which is happening according to our findings.

Thematic investing

The rise in the importance to investors of thematic investing, climate change strategies, as well as impact investing.

This shows that investors are no longer content to simply integrate ESG criteria into an investment approach, in order to avoid the worst effects and risks of poor ESG practices.

Investors want to see that their investments make a positive difference and help support the transition to a more sustainable economic model.

Thematic investing in, say, renewable energy, can help investors have a positive impact, while also meeting their risk and return expectations.

Taking more account of the real-world impact of investment strategies can therefore be seen as a natural accompaniment to other steps taken by investors to tackle climate change, such as making a formal commitment to net zero carbon emissions by 2050.

Active ownership and engagement

Another important step, as highlighted by the report, is the use of active ownership and engagement by investors.

Institutional investors have an influential role as equity owners or debt holders in many companies.

If engagement is to be truly effective, it needs to be ‘engagement with teeth’ as it has been described by many industry observers.

This means being ready to divest if there is insufficient progress with investee companies. Here, we can see increased willingness amongst investors to divest, which should help make engagement more effective.

For oil and gas, the divestment appetite has doubled and there is an increase in active ownership.

This begs the question: how much of this is a function of responsible investment and how much is it a response to risk-return considerations? This is a particularly interesting question, because energy stocks were the best performing stocks last year.


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