Climate change will again top investors’ ESG priorities in 2019, according to a forecast by fund management group Robeco.
Stronger regulation is predicted during the year to influence industries that emit higher levels of fossil fuels, such as companies in the oil and gas, utilities and chemicals sectors, according to an analysis of market dynamics by the fund firm.
The car-making and real estate industries, which account for 30% of energy use globally, will also be affected, the asset manager predicts.
Masja Zandbergen, head of ESG integration at Robeco, said investors are becoming far more demanding of companies, expecting them to take action to protect the business’s future viability in light of the threats posed by climate change.
“Climate change remains at the top of the list,” she explained. “We expect companies to implement a strong governance framework that clearly articulates the board’s accountability and oversight of climate change risks and opportunities.
“We also ask companies to integrate climate risks in their regular risk management framework in order to identify, assess and manage transition and physical risks.”
Robeco’s predictions come as oil giant shell committed to doubling the amount it spends on green energy projects to £3.2bn a year, according to a report by The Guardian.
The company’s head of gas and new energy said he would seek to raise the investment in new energy after 2020, if the initial investment generated positive commercial results.
Robeco has been a part of the investor lobbying group Climate Action 100, where fund firms, retail and institutional investors pool their collective influencing power to affect environmental change at major companies.
“We expect companies to implement measures and take action to reduce greenhouse gas emissions,” Zandbergen said.
“This includes investments in clean technologies and emission-reduction targets. And lastly, we ask them to implement the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) in their mainstream annual financial filings.”