A Ninety One survey of over 6 000 investors found them more strongly opposed to investments in sin industries than in heavy carbon emitters.
On Tuesday, the fund manager published the second edition of its Planetary Pulse survey, Investing for a Carbon Free World: What Investors Want. Planetary Pulse surveyed investors in the UK, the US, Canada, Italy, South Africa, Hong Kong, Germany, Denmark, Sweden and Singapore.
About 59% of those investors opposed investments in companies, sectors or businesses involved in pornography, 57% investments in the weapons trade or arms dealing, and 43% objected to investments in tobacco.
However, opposition to investments in the world’s heavy carbon polluters was low. Just 19% objected to investments in oil companies, and 16% opposed investments in mining firms.
Almost half of the people surveyed were between 31 and 50 years. About 54% identified as male and 45% as female. Sixty-nine percent of the respondents were working full-time, and 16% ran their own businesses.
The survey found that nine out of 10 respondents think reducing carbon emissions should be encouraged and indicated that they were happy for their money to play a part in achieving that aim.
Almost a third of respondents (32%) believed this so strongly that they are happy for their money to be used to reduce carbon emissions regardless of the financial return.
About 45% of investors indicated that reducing carbon emissions should be encouraged. They were happy for their money to influence this and expected a competitive financial return.
About 32% of those surveyed want investment managers and asset owners to eliminate all current investments in high carbon emitters companies and never invest in higher emitters again. Fifty-two percent of those surveyed asked investment managers and asset owners to use their influence as shareholders to help companies, including high carbon emitters, reduce their use or production of carbon.
The compilers of the results of the survey identified four investor types based on how they thought about investing overall and sustainable investing specifically:
These investor types were:
- Quietly cautious (28%). These investors are highly risk-averse and are less interested in interrogating the ethics and practices of companies. They are unconvinced that net zero will affect climate change, and they have limited to no knowledge of net zero.
- Whatever works (21%). These investors have a carefree attitude and go with the flow. However, they are interested in following investment trends and are becoming more aware of net zero.
- The Attentives (24%). These investors carefully plan, research well and pay close attention to where their money ends up. They are willing to pay for things that are ethical and environmentally beneficial to do their part. They believe in net zero, including building a financial and planetary legacy.
- Confident Enthusiasts (27%). These investors are focused on building income and wealth. They are hungry for search, data and ideas. They are net zero enthusiasts, and they will divest if there is no proper action from big polluting economies and sectors.
Ninety One defined net zero as a balance between the amount of greenhouse gas emissions that the planet puts into the atmosphere and the amount removed from the atmosphere.
“This would stabilise global temperatures and address climate change,” the fund manager said.
Ninety One chief executive Hendrik du Toit (pictured above) said in a statement a sobering fact about the drive for net zero is that it needs to work for all of the world’s 7.9 billion people, or it will fail everywhere.
“To save the planet, we must help emerging markets go green. This means robust carbon markets, debt-for-climate deals, and financing options to speed up the transition,” he added.
Justin Brown is a journalist at Citywire, which provides insights and information for professional investors globally.
This article was first published on Citywire South Africa here, and republished with permission.