The scale of global warming has been laid bare by the effect of the summer’s heatwave on the Arctic.
Greenland's main glacier – the largest ice sheet outside of Antarctica – lost a staggering 11 billion tons of ice on one day in July, releasing enough water to fill 4.4 million Olympic-sized swimming pools.1 Around 200 billion tons of Greenland’s ice melted during July, or three times the usual monthly average for the summer.
The heatwave also caused an unprecedented level of forest fires in the Artic regions of Canada, Alaska and Russia, decimating 3.3 million hectares of land, an area bigger than Belgium. 2The Arctic is more vulnerable to global warming than anywhere else on earth, as temperature rises are absorbed by the ice rather than the ocean, causing massive melting and rising sea levels.
July itself was recorded as the hottest month in recorded history, with temperatures above 40 degrees Celsius in Europe setting heat records in many countries. Global temperatures were almost one degree Celsius above the 20th Century average, according to the National Oceanic and Atmospheric Administration (NOAA).3
The Paris Agreement, signed by 195 countries in 2015, aims to limit global warming to 2 degrees Celsius or less above pre-industrial levels by 2100 or sooner. However, the 1.5 degree lower boundary is set to be broken by 2030 unless the world can quickly become carbon neutral, according to a 2018 report by the Intergovernmental Panel on Climate Change.4
Unfortunately, global carbon emissions continue to rise, with a record 33.1 billion tons of fossil fuel- related CO2released into the atmosphere last year, according to the International Energy Agency. 5 Burning coal was found to be responsible for 0.3 degrees of the 1 degree rise average rise in world temperatures since the industrial era began in the 18th century.
“Climate risk is hard to gauge and, therefore, is most likely grossly underestimated in investment portfolios,” says Chris Berkouwer, Portfolio Manager with Robeco Global Stars Equities. “The least you can do is to be aware how your portfolio’s environmental footprint looks like, in particular which companies contribute most in terms of carbon emissions.”
“Most importantly, there should be a strategy in place showing how the portfolio can be steered towards a ‘below 1.5 degree’ scenario. The market is clearly shifting away from companies with profit models that are very prone to rising CO2 taxes and carbon prices, trading at discounts steeper than ever.”
“In other words, there is a clear preference emerging for companies that are either actively providing solutions to the carbon problem, or just run no (physical) climate risk at all. Our strong preference lies with companies that have (bridging) technologies in place to facilitate the transition to a low carbon world.”
The Robeco Capital Growth Funds have not been registered under the United States Investment Company Act of 1940, as amended, nor or the United States Securities Act of 1933, as amended. None of the shares may be offered or sold, directly or indirectly in the United States or to any U.S. Person (within the meaning of Regulation S promulgated under the Securities Act of 1933, as amended (the “Securities Act”)). Furthermore, Robeco Institutional Asset Management B.V. (Robeco) does not provide investment advisory services, or hold itself out as providing investment advisory services, in the United States or to any U.S. Person (within the meaning of Regulation S promulgated under the Securities Act).
This website is intended for use only by non-U.S. Persons outside of the United States (within the meaning of Regulation S promulgated under the Securities Act who are professional investors, or professional fiduciaries representing such non-U.S. Person investors. By clicking “I Agree” on our website disclaimer and accessing the information on this website, including any subdomain thereof, you are certifying and agreeing to the following: (i) you have read, understood and agree to this disclaimer, (ii) you have informed yourself of any applicable legal restrictions and represent that by accessing the information contained on this website, you are not in violation of, and will not be causing Robeco or any of its affiliated entities or issuers to violate, any applicable laws and, as a result, you are legally authorized to access such information on behalf of yourself and any underlying investment advisory client, (iii) you understand and acknowledge that certain information presented herein relates to securities that have not been registered under the Securities Act, and may be offered or sold only outside the United States and only to, or for the account or benefit of, non-U.S. Persons (within the meaning of Regulation S under the Securities Act), (iv) you are, or are a discretionary investment adviser representing, a non-U.S. Person (within the meaning of Regulation S under the Securities Act) located outside of the United States and (v) you are, or are a discretionary investment adviser representing, a professional non-retail investor. Access to this website has been limited so that it shall not constitute directed selling efforts (as defined in Regulation S under the Securities Act) in the United States and so that it shall not be deemed to constitute Robeco holding itself out generally to the public in the U.S. as an investment adviser. Nothing contained herein constitutes an offer to sell securities or solicitation of an offer to purchase any securities in any jurisdiction. We reserve the right to deny access to any visitor, including, but not limited to, those visitors with IP addresses residing in the United States.
This website has been carefully prepared by Robeco. The information contained in this publication is based upon sources of information believed to be reliable. Robeco is not answerable for the accuracy or completeness of the facts, opinions, expectations and results referred to therein. Whilst every care has been taken in the preparation of this website, we do not accept any responsibility for damage of any kind resulting from incorrect or incomplete information. This website is subject to change without notice. The value of the investments may fluctuate. Past performance is no guarantee of future results. If the currency in which the past performance is displayed differs from the currency of the country in which you reside, then you should be aware that due to exchange rate fluctuations the performance shown may increase or decrease if converted into your local currency. For investment professional use only. Not for use by the general public.