The outlook for sustainable investment is diverging globally, simultaneously being propelled forward by regulation in Europe and parts of Asia, most notably in China, and being significantly challenged by growing politicisation and controversy in America.
2023 will be a year of unprecedented policy support.
In October we sponsored the 3rd edition of Building Bridges in Geneva, a conference focused on advancing sustainable finance in Switzerland and connecting the different worlds of finance and international organisations as well as government.
QUAERO CAPITAL has launched Quaero Capital Funds (Lux) – Net Zero Emission, a new UCITS fund invested in companies whose services, products or technologies contribute to the transition to a carbon-free economy. The strategy selects current and future leaders in the field of energy and ecological transition, as well as the circular economy, from around the world and across different sectors. In addition to energy, the fund managers Olivier Ken and Martina Turner also focus on food, textiles, heavy industry, transport, urban planning and the entire supply chain.
We have seen two major steps in the European regulation intended to promote sustainable investment and prevent greenwashing. None has been without controversy and concerns but it continues to move the industry in Europe ahead at a faster pace than elsewhere.
There is a danger that the sustainable investment world focuses too much attention on large companies. There is a rationale to do so, as they may be responsible for larger footprints and greater impacts, but this misses the significant portion of global GDP in the hands of small to medium companies, and the capacity for these companies to respond to environmental and social issues.
After obtaining the ISR label for its fund dedicated to educational real estate, QUAERO CAPITAL continues its momentum and receives the label for its Quaero Capital Funds (Lux) – Infrastructure Securities fund. The fund is the first actively managed fund 100% invested in listed infrastructure companies to have this label.
We are in the middle of the AGM season for most markets and seeing increasing ballots related to environmental and social issues. AGMs represent a very valuable opportunity for investors to challenge the board of directors, as well as use their votes to vote against weak governance structures. As the sustainable investment focus continues to grow, stewardship has become more and more important.
The Sixth Assessment Report on climate change from the Intergovernmental Panel on Climate Change (IPCC), the third part of which was published earlier this month, has not been an easy read. Global CO2 emissions rose by +6% to 36.3bn tons in 2021, more than offsetting the reduction in 2020 due to Covid-19. The sustainable recovery much touted by governments has so far yet to come to fruition.
As investors and companies exit the Russian market in droves, new criteria, such as the defence of democracy and non-dependence on authoritarian regimes, are giving new lustre to previously banned sectors.