COVID-19 & Investing for Environmental Impact
Right now the focus is on the immediate health and economic consequences of COVID-19. In the medium to long-term, could the fall out from this pandemic increase how investors prioritize environmental impact?
According to this Radio France Internationale report:
Though scientists expect carbon emissions to fall by 5% in 2020, the coronavirus pandemic is having very little impact on climate change, according to the World Meteorological Organization… experts warn that without structural change, the emissions declines caused by coronavirus could be short-lived and have little impact on the concentrations of carbon dioxide that have accumulated in the atmosphere over decades.
Making positive environmental impacts alongside financial returns is a hallmark of impact investing. How can alternative systems of investing that prioritize environmental sustainability create opportunities for long-term climate action?
These investors are already weighing.
Yahoo Finance shares what Goldman Sachs, UBS and Barclays predict will be the longer-term implications of the forced shutdown.
In the past, emissions have quickly bounced back as economies have recovered from downturns. However, analysts think the seismic shock caused by coronavirus could provide an opportunity to fundamentally shift both corporate and consumer behaviour towards more environmentally friendly practices.
TripplePundit reports how investment managers BlackRock, Barclays and Citigroup have stated that they will continue with their “sustainability push” even during this pandemic.
The Asian Venture Philanthropy Network (AVPN) examines the opportunities for rebuilding a post COVID-19 world by investing in sustainable plans to boost economies.
Impact Alpha interviews Colin le Duc, a co-founder and partner of Generation Investment Management, on the COVID-19 pandemic’s potential to “persuade all capital that sustainable investing is best practice.”
Karma Impact reports how “the World Economic Forum recommends that companies that receive long-term public financial assistance should be required to take three actions that could come from the impact investing handbook. They must first include risk in company disclosures, and in the case of climate, in line with Task Force on Climate-related Financial Disclosures guidelines. Secondly, they must take science-based data when setting policy, especially when it comes to climate change. Finally, they must be required to invest in low-carbon solutions that create many jobs.”
FT Moral Money highlights how the UN’s Principles for Responsible Investment (PRI) is encouraging companies to consider now an “opportunity to rebuild the corporate world in a more green and sustainable way.”
John Elkington, Executive Chairman and Co-Founder at Volans Ventures, introduces his concept of “Green Swans” in this four-part (at the time of this publication) LinkedIn series based on extracts from his latest book.
A Green Swan is a profound market shift, generally catalysed by some combination of Black or Gray Swan challenges and changing paradigms, values, mind-sets, politics, policies, technologies, business models, and other key factors. A Green Swan delivers exponential progress in the form of economic, social, and environmental wealth creation. At worst, it achieves this outcome in two dimensions while holding the third steady. There may be a period of adjustment where one or more dimensions underperform, but the aim is an integrated breakthrough in all three dimensions.
This TripplePundit article highlights Morgan Stanley’s positive outlook on the future of environmentally sustainable investing.
In this Entrepreneur article, VentureSouq’s Founding Partner Sonia Weymuller’s reflects on how “The COVID-19 crisis has exposed just how intertwined we are, and how issues of public health and the environment need to underpin any investment now being made.”
The COVID-19 crisis brings environmental sustainability opportunities and challenges to the forefront. We will continue to monitor how investors and companies respond.
