Investor Action on Climate Risk – Where Are We?

Since we’ve been working with investors to get banks to overhaul climate stress tests for escalating coastal threats, we thought we’d explore investor action on climate risk this month. See why we are still feeling positive and find out where banks are with net zero. Are investors still applying pressure on oil to transition? And is investing in water still ‘ESG safe’?

While working in this space can be disheartening, July was yet another month with record breaking extreme weather events. Despite this, we’ve been feeling more positive as we reflect on the level of response we’ve had to our report urging banks to stress test right today.

C-Suite & risk heads are engaged; even the private sector is driving cross-sector collaboration to protect against rising seas. Plus, adaptation conversations are finally happening. See what else made it into our 8 positive points on coastal threats.

However, when it comes to harmonizing Asia’s banks and the global climate agenda, there is still much to be done shares Ben McCarron, Founder & Managing Director of Asia Research & Engagement. Find out more in our interview including why their mispricing of exposure to carbon-intensive assets matters.

Some banks are doing better than others, and some are leading the way in energy transition, though investors still want more from them. McCarron advises two key areas for banks to focus on.

But do investors really want 1.5°C Paris aligned operations? Do they really want to transition away from oil? Or are they just greenwashing? And it goes for ESG investors too… it seems like it’s all quiet on the ESG front.

Take oil for example. While it was waning in early 2021 investors were jumping on the bandwagon for big oil to improve their net zero performance but with it booming since then, where are investors now? And did they even notice that big oil is back peddling on their targets?

Not reining in emissions means more water risks ahead. As it is, floods have wrecked havoc this summer. We are clearly not prepared but are investors willing to pour money into drains? Also, is there enough money to keep us from going up sewage creek?

We unpack how investing in water may no longer be ‘ESG safe’, especially in the UK where debt-ridden privatized water utilities have been spewing out raw sewage in the country’s waterways. Clearly, investing in the water sector does not automatically make it ESG friendly so get on top of these risks ahead with our 3 thoughts on investing in water today.

Then there is also  the “dirty” – carbon intensive – side to water supply and treatment. Enter Net Zero Water – we will be talking about this in Stockholm with RSK (leader in environmental engineering & technical services) and also with AGWA, IUCN and so on – so join us if you can, it’s free online!

We will also be in Beijing at the World Water Congress as well as talking to investors in Malaysia and Hong Kong. Climate action is needed now more than ever – so come find us if you don’t know where to start and watch this space for investor engagement with banks.