Global ESG Summit: Embrace the complexities of the transition

During the first panel, climate reporting, adaptation, net zero, active engagement and preferred methodologies were all discussed

Participants in the first panel of the Global ESG Summit warned delegates sustainable transitions will be “messy”, but said this would be “fine” as long as they educate themselves on the impact on portfolios.

During the panel called Climate reporting and adaptation, moderated by ESG Clarity‘s Natalie Kenway, the panellists explored their preferred ways for companies and funds to disclose on their climate impact and how they are working towards net-zero targets.

The panellists were:

Paul Udall, portfolio manager for the Climate Transition Fund, Lombard Odier;
Nachu Chockalingam
, senior credit portfolio manager, Federated Hermes;
Tom Caddick
, head of investments, NedGroup;  Stephanie Maier, member of the ClimateAction100+ Global Steering Committee and global head of sustainable and impact investment, GAM Investments

They discussed how long-term, net-zero targets for 2050 and beyond were “aspirational” and that companies using methodologies such as TCFD and science-based targets over the near term were useful. Adaptation, following the latest findings from the the Intergovernmental Panel on Climate Change (IPCC) report was also addressed.

The debate around active investment versus divestment was also explored covering shareholder resolutions, voting policies and how excluding entire sectors is viewed.

Collaboration across the financial industry was another key talking point.

Caddick said: “There is a lot we can do in finance but it has got to be done collectively. Money and capital is the way to really push change – we need something tangible.”

Udall acknowledged: “I think the tipping point has passed. We have seen enormous momentum of investment into this transition when it was on the fringe of finance for many years and Covid added to the emergency. We are starting to see serious movement in finance.”

However, Chockalingam highlighted it cannot be the finance industry alone pushing the transition and said: “Investors can only do so much. We are reliant on governments and regulators to up the anti on this.”

In her closing remarks, Maier told delegates to “embrace the detail and complexities” of the transition. “We know the urgency but we also know it is not straightforward,” she said.

“There will be difficult conversations and judgements to be made. It will be a messy transition and we need to get ready for that. But it’s fine, we need to make those significant changes and understand what that means for our portfolios.”

The full video of Panel 1: Climate reporting and adaptation is above.

See also: – WWF: We need investors to be part of the nature crisis solution

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Natalie Kenway

Natalie is global head of ESG insight for ESG Clarity and has been an investment journalist for 16 years. She won Editor of the Year at the Aviva Investors Sustainability Media Awards 2021, and was Winner...