In this summer series for ESG Clarity, members of the sustainable investment industry tell us how their thinking on this fast-moving industry has adapted over the years and what changes that has led to.
Here Victoria Hasler, head of fund research at EQ Investors, discusses how the heatwaves and floods seen around the world recently has caused her to think differently about her work and personal life.
What has ESG or sustainable investing changed your mind about over the past couple of years?
I’m a big believer in climate change mitigation. The science on climate change is irrefutable and, whilst we all know that weather patterns may show low correlation to climate change in the short term, the visible evidence of climate change is mounting. This summer has been a classic example with scorching heatwaves across much of Europe and the US, and devastating wildfires which have caused huge economic losses and, in many cases, tragic losses of life. I think there are few who would now argue that climate change isn’t real.
So then we enter an interesting debate about how best to slow, stop and perhaps even eventually start to reverse the catastrophic consequences of human-induced climate change, as well as a fascinating (albeit often fairly demoralising) discussion about whether we have now reached a tipping point where limiting post-industrial global temperature rises to 1.5 degrees is even possible any more, or whether we should abandon that goal and aim for 2 degrees.
Either way, many of the funds in which we invest at EQ seek to address climate change migration goals by investing in both environmental solutions and companies leading the way in reducing emissions in their own operations.
Lately, however, I have been thinking about something else. If we are well on our way to a world where temperatures are, at best, 1.5 degrees above pre-industrial averages, it seems certain that our planet is set to change. Hotter summers, wetter winters, higher wind speeds (to name but a few) will be natural consequences of the changes we have inflicted upon the world. In which case, whilst it is still vital to invest in climate mitigation to limit any further temperature rises, should we also be focusing more on investing in climate change adaptation and resilience?
There is no doubt in my mind that, to preserve anything like the way of life that we are used to, many things will have to change. Some of these might be easy, and relatively cheap. For example, painting buildings and, particularly, roofs in light colours reflects heat and keeps buildings cooler. This is already commonplace in warmer parts of the world, and something that could offer a sensible solution in previously cooler locations too.
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