26 TRADE & FINANCE
THE TIME IS NOW
FOR SUSTAINABLE
INVESTING: BUT WE
NEED STRONGER
POLICY ACTION
“The good news is that
we are beginning to see
real leadership from a
broad range of investors,
particularly on the need to
drive substantial capital
towards addressing climate
change challenges.”
Jessica Robinson, Chief Execu tive
Association for Sustainable and
Responsible Investment in Asia (ASrIA)
The time is now for sustainable investing. It
is no longer an investment approach that is
pursued by niche, ethical or impact investors.
Sustainable investing is going mainstream.
But, with the world facing unprecedented
challenges such as irreversible climate change
and massive environmental degradation, we
need much more. And, for that, we need
strong policy action. Industry action is
critical but we cannot rely on a market-led
transformation alone – it must also be
policy-led.
Leadership from within the industry
The good news is that we are beginning to see real leadership
from a broad range of investors, particularly on the need to
drive substantial capital towards addressing climate change
challenges. As a recent example, an industry-led statement
on climate change has been signed by over 370 leading
institutional investors, representing assets of over US$24trillion
. Through this statement, institutional investors are calling for
stronger political leadership and for the more ambitious policies
urgently needed in order for climate investments to be scaled
up. This commitment by major investors is highly significant.
Investors are part of the solution
Smart investors can and will be at the heart of change, not
least because of a growing awareness that they are facing the
prospect of significant losses and erosion of value from climate
change and environmental damage. At the conservative end,
the Economist Intelligence Unit recently calculated that the
resulting expected losses from climate change to the current
stock of manageable assets in discounted, present value
terms are valued at US$4.2trn, roughly on a par with the total
value of all the world’s listed oil and gas companies or Japan’s
entire GDP (Economist Intelligence Unit, 2015). Warming
of 6 degrees Celsius could lead to a present value loss of
US$13.8trn, representing roughly 10% of global total assets.