Decarbonization, Increasing Biodiversity Policy, Survey Findings

Decarbonization, biodiversity and active ownership to tackle climate change loom large in the investment policies of institutional investors, according to a climate survey released Monday by Dutch asset manager Robeco.

The survey conducted in January by CoreData Research for Robeco included 300 large institutional investors in Europe, North America and Asia-Pacific with $23.7 trillion in assets under management collectively.

For those 75 percent of investors, climate change is considered a central or significant factor in investment policy, up from 34 percent two years ago, according to the survey.

Nearly half of investors surveyed have made or will make public commitments to achieve net zero greenhouse gas emissions from their investment portfolios by 2050. Of the 27% that have made commitments, investors in Europe and Asia lead their peers. Only 11% of North American investors are committed to net-zero, although 44% are investigating the concept, Robeco found.

Also increasing is investor appetite for divestment from fossil-fuel oil and gas companies, with institutional investors expecting to divest 19% of their portfolios in the next five years. Investors are also considering more asset classes for their decarbonization efforts in the next three years, including commodities, according to survey respondents.

Rising temperatures linked to climate change that also threatens biodiversity are of increasing importance, investors report, with 41% citing biodiversity as an important or central factor in their investment policies, and 56% predicting it will occur within the next two years, compared to 19% two years ago.

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The survey also found more thematic investments in sustainability-related themes such as renewable energy or green technology and more active ownership. While 54% of investors considered active ownership, including proxy engagement and voting, a key part of their investment policy two years ago, 73% now say it will happen within the next two years, the survey found.