Investors continue climate change efforts despite headwinds

The desire to protect biodiversity is becoming mainstream, and enthusiasm for investing in renewables is growing, as the survey revealed a clear shift in the focus moving from aspiration to implementation. Green bonds, for example, are seen as ideal for the integration of biodiversity issues into portfolios over the next one to two years.

However, sentiment was hurt by a number of headwinds for the third annual survey of 300 investors, led by greater geopolitical uncertainty following Russia’s invasion of Ukraine. This added to inflationary pressures and triggered an energy price spike, particularly in Europe, leading some investors to pause or revise plans to move away from fossil fuels in the short term.

And at the same time, investors are encountering political pressure through an anti-ESG movement that has become more vocal against the use of environmental, social and governance factors in investment decisions. A significant divergence has emerged between the US, where anti-ESG protagonists argue that it cuts into returns, and with Europe and Asia-Pacific, where investors conversely fear the consequences of not using sustainability factors.

“This year’s survey highlights the challenging journey that investors are undertaking as they advance from aspiration towards implementation of their net-zero commitments,” says Lucian Peppelenbos, Climate and Biodiversity strategist at Robeco.