Enabling climate transition: the path to net zero

[7 min read, Open as pdf]

• Transitioning to a low-carbon economy is critical
• ‘Green-washing’ is a problem
• Selection methodology is key

 
“A code red for humanity. The alarm bells are deafening and the evidence is irrefutable.”
UN Secretary General Antonio Guterres discussing the most recent Inter-Governmental Panel on Climate Change (IPCC) report published in August 2021.

For advisers looking to incorporate a Net Zero approach into a client portfolio, where ESG preferences are high, we would advocate a three-step approach.

1.Understand the Carbon footprint of your existing portfolio
2.Consider how substitutions of traditional with ESG-screened funds could reduce that Carbon footprint
3.Consider whether, and to what extent, an allocation towards climate solutions, which by their nature may be higher risk investments, will actively contribute to achieving the path to net zero.

A bias towards ESG and a moderate investment in climate solutions, can help achieve those objectives for those clients who seek climate-oriented values in their investment portfolio, as well as their day-to-day living,

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