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Impact investing most effective on carbon industries

carbon_esgInvestors are making the most impact when engaging with carbon intensive industries, a survey of Fidelity International’s in-house analysts has found. 

As ESG – or environmental, social and governance – investing continues to be an area of growing importance for investors, the study found that the impact of company engagement is “relatively” consistent across regions - but the biggest difference is being made in sectors which are carbon intensive. 

Gita Bal, global head of research for fixed income at Fidelity, said: “Carbon emission is a key topic and companies are paying more attention to this. There is a very clear acceleration in the importance of engagement in the last six to nine months - management teams are waking up to the power of ESG very visibly.” 

Fidelity’s ‘Pulse Survey’, also found that overall business sentiment improved in October. Out of 176 responses, 44% say management sentiment has improved in the last month, while only 8% believe it has decreased.

However, the study highlighted that business sentiment may have reached a peak.

Terry Raven, director of European equities, said: “While it’s pleasing to see a continuing uptick in business sentiment since the peak of the coronavirus, with such a high proportion of responses, it becomes harder each month to see how the picture can continue to strengthen substantially from here.”

He added that October possibly “marks a plateau” for the rate of improvement in global business conditions.

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