PublishedJune 7, 2022, 11:00
Today, these investment funds often do not oblige companies to act with respect for the environment. Pressure should be exerted by asset managers, believes Greenpeace Switzerland.
Groups like ABB set an example to follow, as they take climate protection more and more seriously and commit to meeting the Paris climate targets.
Archyde.com
The idea is attractive: you invest your money in sustainable equity funds, which allows you to grow your fortune while doing good. Almost all banks have now identified this need and offer “green” investments.
However, “what is currently presented as a sustainable investment is generally not”, explains Peter Haberstich, financial expert of Greenpeace Switzerland. Most banks certainly offer sustainable investments, but the portfolios do not exclusively contain climate-friendly companies, since there are also some that are a little less sustainable than the others.
Too few climate-friendly companies
In the field, they are called “Best in Class”, ie the best among comparables. For example, a fund may also contain shares of an airline that is simply acting a little more environmentally friendly than its competitors. But that doesn’t mean the company is truly sustainable.
A Greenpeace “Mystery Shopping” confirmed this disillusionment. Potential customers have come to the banks with the wish to invest 10,000 francs in a sustainable way. No banking institution has been able to offer them a completely climate-friendly fund. “There are still too few truly sustainable companies to fill a well-diversified ‘green’ portfolio,” explains Peter Haberstich. But what would such a wallet look like?
According to the Greenpeace expert, it would contain exclusively firms which have undertaken to respect the Paris climate objectives: they continuously reduce, on time and in a measurable way, their CO2 emissions.2 to tend to zero. A fund with this strategy should also take into account the emissions emitted by the companies’ products and services. The airline would then be eliminated and the railway integrated.
A great influence of asset managers
According to a study by the research institute GFS, this also corresponds to a requirement of the population: 67% of respondents want their investments to be climate-friendly, and 36% believe that investment products should redistribute capital – from polluting companies to truly sustainable ones.
But how to put pressure on companies? “The responsibility lies with the asset managers,” says Peter Haberstich. The latter would have a great influence, because the firms depend on the price of their shares.
This is where the first glimmers of hope appear. “Fund managers, like Black Rock, are now influencing companies,” says Peter Haberstich. The yield must not suffer from this, however: “Companies such as ABB, Mammut, Ikea or Tschibo are taking climate protection more and more seriously, while still managing to manage their business successfully.”
As asset managers have a big impact, Greenpeace now wants to establish a ranking, where those who are most committed to environmental protection get the highest scores. “Funds made up solely of shares of truly sustainable companies would send a strong signal, an incentive for other fund providers,” says Peter Haberstich.