Aug 10 (Reuters) – Dire warnings about climate change are a call to action for investors who put their money into helping the environment. But the news also heightens a debate about how to make these strategies effective, financial executives said.
A U.N climate report on Monday found that global warming is dangerously close to spiraling out of control. Even the most severe carbon emission cuts are unlikely to prevent global warming of 1.5 degrees Celsius above preindustrial temperatures by 2040, a level that many scientists believe must be achieved to avert catastrophic climate change. read more
Green investing has attracted a flood of cash and boosted companies like electric car maker Tesla Inc (TSLA.O) and clean energy company NextEra Energy (NEE.N) that promise to help a transition away from fossil fuels.
But sustainable investment managers are confronting a two-sided challenge for ESG, or environmental, social and governance, funds.
Fund managers want to convert public enthusiasm into dollars invested while simultaneously allaying suspicions that some funds are “greenwashed” as skeptics claim.
“Not all ESG funds are created equal and investors must do their research to determine whether their investments are making a real impact or are simply feeding into an ESG-centered marketing push,” said Green Century Capital Management President Leslie Samuelrich.
NEW GREEN HIGH
Globally, sustainable funds hit a record high of $2.24 trillion in assets in the second quarter, Morningstar data showed, up 12% from the end of March. read more
Many of these funds choose their investments in part on ratings of portfolio companies’ sustainability assigned by outside firms, but these grades can diverge widely.
An association of global market regulators took the first step last month towards governing the ratings. L8N2OZ2YS The U.N. report will further pressure funds to make their climate disclosures more transparent, said R. Paul Herman, chief executive of sustainable ratings agency HIP Investor.
Another challenge is finding green investment opportunities in emerging markets, which have fallen behind in curbing emissions. China, for example, said last year it would seek carbon neutrality by 2060, a decade later than other top economies.
Just 2% of the money tracked by Morningstar has gone to funds based in Asian countries other than Japan.
Randeep Somel, manager of the M&G Climate Solutions Fund in London (MNG.L), said more government focus on curbing emissions in those countries would inspire confidence among investors.
“Once governments start to move in emerging markets, you will see companies moving more quickly,” Somel said.
HOW TO HANDLE FOSSIL FUEL?
One of the biggest questions is whether to invest in fossil fuels at all. An increasing number of asset managers, such as Green Century, and pension funds, such as those of Maine and New York City, have said they won’t. Others argue it is better to work with energy companies to spur change. read more
“It’s easy to exclude coal companies or bad actors from your portfolio and only invest in companies that are green. The real impact comes from taking high carbon emitters and forcing them to modify their behavior,” said Michael Rosen, chief investment officer of Angeles Investment Advisors.
Angeles, which manages $7 billion in assets, would still own an oil company if it took climate change seriously, Rosen added.
Mark Hays, director of sustainable investing for Glenmede of Philadelphia, said an earlier UN climate report in 2019 drew attention from mainstream investors. Monday’s report could spur more action, he said.
Climate change “is going to be increasingly financially material to your investment portfolio,” Hays said.
(Corrects spelling of name in 13th paragraph to “Somel”)
Reporting by Ross Kerber in Boston
Editing by Greg Roumeliotis and Cynthia Osterman
TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 103.40 points at 24,542.48.
In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.
The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.
The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.
The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.
This report by The Canadian Press was first published Oct. 16, 2024.
TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.
The S&P/TSX composite index was up 205.86 points at 24,508.12.
In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.
The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.
The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.
The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.
This report by The Canadian Press was first published Oct. 11, 2024.
TORONTO – Canada’s main stock index was little changed in late-morning trading as the financial sector fell, but energy and base metal stocks moved higher.
The S&P/TSX composite index was up 0.05 of a point at 24,224.95.
In New York, the Dow Jones industrial average was down 94.31 points at 42,417.69. The S&P 500 index was down 10.91 points at 5,781.13, while the Nasdaq composite was down 29.59 points at 18,262.03.
The Canadian dollar traded for 72.71 cents US compared with 73.05 cents US on Wednesday.
The November crude oil contract was up US$1.69 at US$74.93 per barrel and the November natural gas contract was up a penny at US$2.67 per mmBTU.
The December gold contract was up US$14.70 at US$2,640.70 an ounce and the December copper contract was up two cents at US$4.42 a pound.
This report by The Canadian Press was first published Oct. 10, 2024.
