Investment considerations

The focus on all climate themes is expected to grow in the next three years. The focus on net-zero/Paris-aligned investment strategies may increase to 70%. Focus on climate adaptation and mitigation, as well as biodiversity-related themes, themes may also rise.

Takeaway

Asset managers may want to help clients understand and evaluate key climate-related opportunities and risks.

Survey questions

In which climate themes are you investing today, and which are you likely to invest in over the next three years?
What percentage of your portfolio integrates climate considerations, and how might that change in the next three years?

FINDINGS

Asset owners expect to increase their focus on all climate themes over the next three years

Respondents expect to increase their investments in all climate themes, including net-zero/Paris-aligned approaches.

While mitigation, adaptation, net-
zero, waste reduction, and conservation are top themes, asset owners also
plan to focus more on biodiversity
and deforestation.

“Delivering on ESG: 2022 ESG Research Results – Global,” Coalition Greenwich, a division of CRISIL, an S&P Global Company, November 2022. Total respondents globally: 305 | North America: 102 | Europe: 127 | Asia: 76.

Across the board, asset owners expect more climate integration…

The number of owners who currently allocate at least 50% of their portfolio to climate investing will grow from 24% to 39%.

The number of owners who currently have less than 10% of their portfolios invested in climate change is expected to fall from 34% to 15% in three years.

Nearly one quarter of European owners have some allocation to climate-specific funds.

*Excludes asset owners not expressly considering climate change.
“Delivering on ESG: 2022 ESG Research Results – Global,” Coalition Greenwich, a division of CRISIL, an S&P Global Company, November 2022. Total respondents globally: 305 | North America: 102 | Europe: 127 | Asia: 76.

…yet, most lack exposure to climate-specific mandates

Just 17% overall are currently investing in dedicated climate funds or mandates.

This could indicate that asset owners need a clearer roadmap from providers.