In line with the Paris Agreement of December 2015, the international community is committed to align future finance flows with climate-friendly development. Following this, investors have increasingly started to realise the number or risks associated with high carbon exposure of investments.
A new study commissioned by the Swiss Federal Office for the Environment (FOEN), headed by South Pole Group and CSSP (Center for Social and Sustainable Products) reveals that, in most cases, better returns are achieved when pursuing climate-friendly investment strategies as opposed to traditional investments. The study was recently presented at the EU Impact Forum in Zurich. The main objectives of the study were to expand knowledge about determining the climate impact of finance flows, and examine the performance of investment strategies that are more climate-friendly.
The report unveils that determining the climate impact of and for equities and corporate bonds is relatively easy, and that the offering of relevant climate-friendly investment strategies is also increasing. The study additionally proves the historical returns of such investments in line with the market.
A set of recommendations is provided for investors, including; establishing the climate impact of portfolios, creating transparency, as well as defining strategies, setting goals and establishing guidelines in order to address the risks associated with climate change and recognizing opportunities.
Read the full report here (German) by FOEN.
