As recession fears rose last week, government bond yields in Europe reached new lows. In our opinion, a long-term investor ought to seek better investments than assets that will yield negative nominal returns over several decades.
Earlier this year QUAERO CAPITAL became a signatory to the Carbon Disclosure Project (CDP), an organization that campaigns for better disclosure of environmental performance data from companies, cities, states and regions. It aims to make environmental reporting and risk management a business norm, and drive disclosure, insight and action towards a sustainable economy.
While the European Union signals increasing ambition to curb carbon emissions, the common perception is that momentum in the US market is in the opposite direction. While the ambitions of the Trump administration have been to cut back environmental regulation, there are reasons to believe these reversals may be stalled. Factors to consider in the US market include:
The election of Ursula von der Leyen as the Head of the European Commission adds to momentum behind carbon emission reduction appetite in the EU. She promised a « European Green deal within the first 100 days of its mandate ». Objective: to make the European Union « the first carbon-neutral continent by 2050 ». She confirmed her support for a CO2 emissions reduction target of 50-55% in 2030 compared to the 40% currently agreed, and she is considering a carbon tax at the borders, a proposal supported by France since 2009 but fiercely rejected by Germany whose industry is a major exporter. The new President also mentioned her willingness to extend the European carbon market (the EU-ETS) to construction, road transport and maritime transport sectors.
Sustainable investment has evolved in the US market less rapidly than in Europe to date due to multiple reasons, one of which has been less ambitious regulation at the national level. ESG policy has become a partisan issue and the current administration has rolled back regulation, bucking the global trend. A recent whitepaper from Morningstar said that in the US, where climate change is a ‘contested concept’ ESG investment factors must be justified by explaining ‘why’, while in Europe they must explain ‘why not’. Despite this headwind, assets under management in ESG-oriented funds grew 40% to €684bn over the four years to the end of 2018.
Dans cette chronique publiée le 1er juillet 2019 dans Le Temps, notre CEO Jean Keller revient sur les raisons qui ont poussé le gérant star britannique Neil Woodford à suspendre les remboursements de son fonds amiral.
Il insiste notamment sur l’importance d’adapter la liquidité d’un fonds à celle des investissements sous-jacents et incite les gérants à faire preuve d’auto-discipline en limitant volontairement la taille de leur fonds pour sauvegarder les intérêts des investisseurs.