Zehrid Osmani, Manager of Martin Currie Global Portfolio Trust, said: “The energy transition towards greener energy sources is also bringing some major shifts in investment programmes. All of this is leading to opportunities for investors in areas such as renewable energy, electric transportation, more efficient and greener buildings, or robotics and automation as a way to reduce energy intensity. It is also unleashing a major innovation cycle which can benefit investors in areas such as climate solutions, and food and water solutions. Overall, this is a vibrant period for investors to find opportunities in innovative areas. At the same time, it is important that investors stay disciplined in terms of assessing the investment attractions through a structured valuation framework, in order to avoid bubbles that could be forming as part of this increased focus on climate change opportunities.”
James Hart, Investment Director at Witan Investment Trust, said: “We believe that a blunt exclusion policy to greenwash a portfolio runs counter to meeting the goals set by the Paris Agreement and is likely to be detrimental to shareholder returns. Therefore, in addition to investments in climate change and renewable energy strategies, our portfolio may contain mining companies (copper for electrification or nickel for battery storage), steel manufacturers (to make wind turbine towers or electric grids), paper and packaging companies (to address overuse of single-use plastics) and aerospace manufacturers (developing fuel efficiency in aviation). Our belief is that it is more important to focus on what a company’s contribution to the long-term global carbon reduction is, rather than to fixate on its historic carbon footprint – provided of course that these companies are best-in-class and that there is a clear path to reduce emissions over time.”
Climate change affecting strategy and investment process
Mark Atkinson, Head of Marketing and Investor Relations at Alliance Trust, said: “We generally prefer to engage with companies on how they run their businesses, rather than having blanket exclusions on certain industries or sectors, except where it is futile as is the case with companies with significant exposure to tar sand and thermal coal. But as responsible long-term investors, we believe it’s essential to integrate environmental, social and governance factors into Alliance Trust’s investment processes. It can help manage risks better, improve returns and have a positive impact on society.”
Zehrid Osmani, Manager of Martin Currie Global Portfolio Trust, said: “We have always been focused on sustainability assessment across all companies that we research, so our investment process has remained unchanged. Specifically, within environmental and social risks, we assess each company’s carbon footprint, the pollution risk of its activities, the resources risk involved in its operations, but also the impact on the environment across its supply chain – as well as the social impact that its activities have on societies in which it operates. Our research efforts have been pointing towards stocks in some of the themes that we believe are likely to benefit from the increased focus on climate change, such as electric transportation, renewable energy infrastructure, more efficient and greener buildings, climate solutions and food and water solutions.”
