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.”
Please read this important information before proceeding further. It contains legal and regulatory notices relevant to the information contained on this website.
The information contained in the Website is NOT FOR RETAIL CLIENTS - The information contained in the Website is solely intended for professional investors, defined as investors which (1) qualify as professional clients within the meaning of the Markets in Financial Instruments Directive (MiFID), (2) have requested to be treated as professional clients within the meaning of the MiFID or (3) are authorized to receive such information under any other applicable laws. The value of the investments may fluctuate. Past performance is no guarantee of future results. Investors may not get back the amount originally invested. Neither Robeco Institutional Asset Management B.V. nor any of its affiliates guarantees the performance or the future returns of any investments. 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.
In the UK, Robeco Institutional Asset Management B.V. (“ROBECO”) only markets its funds to institutional clients and professional investors. Private investors seeking information about ROBECO should visit our corporate website www.robeco.com or contact their financial adviser. ROBECO will not be liable for any damages or losses suffered by private investors accessing these areas.
In the UK, ROBECO Funds has marketing approval for the funds listed on this website, all of which are UCITS funds. ROBECO is authorized by the AFM and subject to limited regulation by the Financial Conduct Authority. Details about the extent of our regulation by the Financial Conduct Authority are available from us on request.
Many of the protections provided by the United Kingdom regulatory framework may not apply to investments in ROBECO Funds, including access to the Financial Services Compensation Scheme and the Financial Ombudsman Service. No representation, warranty or undertaking is given as to the accuracy or completeness of the information on this website.
If you are not an institutional client or professional investor you should therefore not proceed. By proceeding please note that we will be treating you as a professional client for regulatory purposes and you agree to be bound by our terms and conditions.