European investors lead the way in net-zero commitments

European investors are leading the way in making a net-zero commitment compared to their global peers, new research has found.

The Robeco Global Climate Survey found that 37% of European investors and insurance companies had made a public commitment to the net-zero goal by 2050.

Whereas only 19% in North America and 20% in Asia-Pacific had pledged to achieve net zero.

The proportion of investors globally that had made a net-zero commitment or are in the process of doing so rose slightly from 45% in 2022 to 48% this year.

“Many European investors see sustainable investing as being in the best interests of their members and stakeholders and therefore part of their fiduciary duties,” according to the report. “Unlike in the USA, where ESG investing is acquiring controversial political overtones, European politicians and regulators are generally supportive of action on climate change.”

The survey also noted that European insurance companies, 39% of which have already made a public commitment with another 28% in the process of doing this, had been driven to act in large part by internal stakeholders.

“This may be due to the impact that extreme weather events, which climate experts expect to become more frequent and damaging if global temperatures rise, will have on the viability of insurers’ business models,” the report said.

The role of politics and regulation is also prominent, with the majority of European investors (63%) concerned about political pressure and/or legal actions if they do not take positive action on climate change. This is compared to 57% in Asia-Pacific and only 40% in North America, where investors are more concerned about the impact of pursuing ESG-friendly strategies.

Nearly half (47%) of North American investors were concerned about the political pressure or legal action if they implemented ESG investing, whereas only 30% of European investors were.

Elsewhere, European investors are more likely to want to preserve wildlife and ecosystems as nearly a third (32%) of European investors say they will put a Just Transition, which takes into account how environmental/sustainability changes impact local communities, at the centre of their investment policy within the next two years.

© 2023 funds europe



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