At FCLTGlobal, we often try to identify the “pain points” that need solving and will lead to action. Participants identified key three key issues across the investment value chain:
- Companies want to “green” assets, but face challenges in communicating these plans with investors. Companies often strive to manage assets through their climate transitions, as they recognize this leads to greater financial returns and more tangible progress on decarbonization (relative to divestment or offsets). However, executives struggle to earn credibility from their investors around these plans, given the long-term nature of the transitions and strategic pivots required.
- Asset managers want to satisfy investor demand for “sustainable” products, yet are challenged by short-term mindsets. Managers face mounting demand for “green” products, particularly from public market retail investors. Yet while most managers recognize that sustainable transitions require a long-term mindset, their investors are often short-term oriented. For private equity managers, this disconnect may represent an opportunity to decarbonize assets more efficiently than public market counterparts.
- Asset owners face growing pressure to divest carbon-intensive assets, yet recognize that divestment hinders both decarbonization and fund performance. Boards and other stakeholders are pressuring owners to divest carbon-intensive assets in order to improve performance on climate metrics quickly. However, owners understand that divestment prevents much-needed capital from flowing to transitioning sectors, which both inhibits decarbonization of the economy and diminishes their own returns.
We recognize that there is much more work to be done on funding the climate transition, and we are continuing our efforts in this area.
Our forthcoming Climate Roadmap Conversation Guide will facilitate communication amongst companies in investors around their climate transition strategies.
In addition, FCLTGlobal is hosting a follow-up webinar on Taking Action after COP26 on 6 December 2021. Panelists include David Blood of Generation IM, Charles Emond of CDPQ, Jim Fitterling of Dow, and Pam Holding of Fidelity. Registration is open to all here.
- Bernard Looney, CEO, bp
- Tzu Mi Liew, CIO, Fixed Income, GIC Private Limited
- Saker Nusseibeh, CBE, CEO International, Federal Hermes
- Carmine Di Sibio, Global Chairman and CEO, EY
- Dan Binder, Senior Vice President, Investor Relations and Corporate FP&A, Walmart
- Robert Coveillo, Chief Sustainability Officer & Government Affairs, Bunge
- Wendy Cromwell, Head of Sustainable Investment, Wellington Management Company
- Neil Cunningham, President & CEO, PSP Investments
- Linda Eling-Lee, Managing Director, MSCI
- Carol Geremia, President, MFS Investment Management
- John Goldstein, Head of the Sustainable Finance Group, Goldman Sachs
- Gail Harris, Lead Director, Evercore
- Andy Howard, Global Head of Sustainability, Schroders
- Martin Lipton, Senior Partner, Wachtell, Lipton, Rosen & Katz
- Sean Ma, CEO, Snow Lake Capital (HK) Limited
- Deborah Orida, Senior Managing Director & Global Head of Real Assets, CPP Investments
- Kevin Sneader, Co-President of Asia Pacific, Goldman Sachs
- Bob Sternfels, Global Managing Partner, McKinsey & Company
- Alexander Tokarz, Head of Group Strategy, Syngenta
- Mark Wiseman, Chair, AIMCo
We welcome further suggestions and opportunities for collaboration. To learn more about the topics discussed here, view our library of resources at www.fcltglobal.org, follow us on social media @FCLTGlobal, or email [email protected].