We often talk about the economic combination and climate risks due to the concerns given data and natural disasters that are affecting our planet. I’ve been hearing for more than a year about Esg (environmental,social and corporate) how medicine that will solve our problems in the future, the data tell us it has gone from 5.7 billion euros in 2018 to more than 20 billion euros in 2019; a good sure but there are too many years when nothing has been done and now since nature is “rebelling” against man, we try to run to the shelters with financial instruments aimed at making up to the problem
Environmental sustainability was at the heart of the Davos meeting in January where the main world characters discussed how to prevent global warming, the reduction of harmful gases and prevention in case of natural disasters.
Investments in renewable energy show positive numbers, the data say 295 billion dollars with the increase of wind farms and areas used for photovoltaic panels with storage systems a bit like Elon Musk’s model for Solar City. Fortunately, world powers such as China and the US are allocating billions to the cause, Europe is also moving towards green investments with the launch of bonds whose theme is to prevent environmental pollution; Ursula von Der Leyen’s choice is affecting the way European financial operators act, with the identification of a green label for retail products.
In terms of investments in environmental sustainability, we find the world’s first managed mass manager, the Black Rock (a total of 7 trillion dollars under management) where, as its founder Larry Fink says, the fund will gradually decrease its weight towards the companies with a high environmental sustainability risk to those who will commit to reducing CO2 emissions.
At this point if you are an investor what to do?
The energy transition from fossil fuels to green energy will still be long but one thing is plausible, those who invest now on sustainable economic assets will have higher returns. Let me give some examples of photovoltaic panel industries, electric car batteries, hydrocarbon companies that adopt clean fuels, manufacturers of “green” materials for building houses and infrastructure, car manufacturers such as Toyota, Nissan, Nio .
Of one thing I am sure, the governments of nations must really wake up and invest as soon as possible and raise awareness of the world’s population otherwise the risks of natural disasters will be more and more serious.