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Are European investors leading the world in net zero pledges?

Impact investing more widely used, reflecting it is now starting to enter the investment mainstream


Pete Carvill

European investors and insurance companies are making bigger strides when it comes to public commitments to hitting net zero in carbon emissions by 2050 than the rest of the world, according to a new report from Robeco.

The 2022 Global Climate Survey found that 40% of European investors and 43% of insurance companies have made a public commitment to hitting the target, compared to an overall 27%. Across territories, only 11% of North American investors have made a public commitment to net zero, alongside 31% of those from the Asia Pacific region.

Despite these depressing numbers, Robeco said a ‘substantial’ proportion of North Americans (44%) are investigating what such a commitment would entail.

The authors of the report said that thematic investing was one of its key findings for 2021.

It wrote: “70% of investors are either currently implementing thematic investing as a high or core priority (35%), while the same number are doing so as a low priority. Impact investing, or investing with positive ESG intentions and objectives, is also increasingly in use, with 25% saying this is being implemented as high or core priority.”

Robeco added: “It is also notable that European and Apac investors are ahead of North American investors in adopting thematic investing. Impact investing is more widely used in Europe, compared to the other regions, reflecting the fact it is now starting to enter the investment mainstream there.”

It went on: “One reason for this is that many investors now expect impact investing to provide returns, as well as having a positive impact. Another enabling factor here is that tools, such as the UN Sustainable Development Goals (SDGs), can help investors to target positive impacts through their investments, or with investing thematically.”

Robeco says its report comes from work conducted by CoreData Research among 300 institutional and wholesale investors in Emea, North America, and Asia Pacific. The type of firms included: insurance companies, pension funds, private banks, fund-of-funds, advisory firms, wirehouse broker/dealers, endowments and foundations, sovereign wealth funds, and family offices. They ranged in size from holding less than $1bn to over $1tn in AUM, with a total AUM for all respondents of $23.7tn.

The report from Robeco reflect a growing trend, some say craze, on the continent for ESG investing. Back in January, Expert Investor reported that Broadridge’s The Rise of the Retail Investor white paper saw five trends and themes that the company says has pushing a democratisation of corporate governance within Europe.