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Press release
Bonn, 02.06.09: How does the financial crisis affect the investment industry's efforts to better integrate ecological and social issues in investment decisions? What impacts can be expected for the future? These are the key topics of a study published today by Germanwatch and consulting firm onValues on the occasion of the Bonn Climate Change Talks. According to the study, the financial market sees the UN climate treaty in Copenhagen as a tipping point for the further growth of sustainable investments - especially those that relate to environmental and climate issues.
"An ambitious climate treaty in Copenhagen
will send a clear signal to financial market actors in support of the successful
mainstreaming of products and concepts inclusive of environmental and social
considerations. However, a failure of the negotiations in combination with
the current financial crisis could put these efforts on hold for a long
time," says Ivo Knoepfel of onValues and author of the study.
In the last years, investment opportunities
relating to energy efficiency and renewable energies, or innovative financial
products (e.g. pension plans, mortgages) that take into account climate-related
issues, have been increasingly demanded by private and institutional investors.
But this relatively young market is particularly vulnerable to changes
in general market conditions, as in the case of the current financial crisis.
Asset managers and investment banks have already started to partly reduce
their capacity and offer in this area due to the crisis. Some pension funds
have cut back (or put on hold) their sustainable investments. Single asset
managers and banks have downsized their specialist teams and decided to
outsource a part of the investment know-how to external service providers.
More drastic cutbacks are possible depending on how long the crisis lasts,
observes the author. In case of a protracted crisis, the market could switch
into a "survival mode" effectively focusing on traditional asset classes
only and stopping innovation in the field of sustainable investments.
On the other hand, recent trends demonstrate that green investments in renewable energies and climate protection technologies have experienced only a modest slow-down in countries with a supportive political framework, as in the case of the German Renewable Energy Sources Act, compared to others. Christoph Bals, climate expert and Executive Director for Policy at Germanwatch, envisions a great chance in an ambitious climate treaty to transfer these kinds of successful national measures to the international level. "Who wants to be protected against high future energy prices, to generate secure jobs for the future during the economic crisis, to mitigate the worst consequences of global climate change will need to invest in large scale energy efficiency efforts, renewable energies and the corresponding infrastructure needed", according to Bals. The financial industry is waiting for a fresh wind to blow from Copenhagen, propelling the industry towards more future-proof investments.
The study "Observed and expected impacts of the current financial crisis on the investment industry's consideration of ESG and climate-related issues", March 2009, is available at: www.climate-mainstreaming.net/esg09
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