How green funds help protect investors from climate change risks

funds, investment, climate, green, carbon,
Middle East

How green funds help protect investors from climate change risks

Investment funds in Europe are more exposed to climate-sensitive economic sectors than banks, insurers and pension funds. However, few investment fund climate-related financial risk assessments have been conducted. We've examined the portfolios of more than 23,000 EU investment funds and reveal some relative long-term benefits of green funds. Getting to carbon neutrality is immensely expensive. In the EU alone, reaching zero emissions by 2050 is estimated to cost $300 billion per year for the foreseeable future. Taxpayers will play a role in this, but a major part of the financing, nearly two-thirds, will need to come from private investments. So, what is the role of investment funds in moving the planet towards carbon neutrality? After all, funds around the world manage more than $60 trillion of assets, around one-third of which are European. Indeed, many fund managers are doing what they can to respond to growing investor demand that environmental and other sustainability risks and challenges be reflected in their portfolio selection. Assets in European ESG investment funds have been booming to over $1.7 trillion today. The bad news is that this is only a drop in the ocean, given the scale of what needs to shift. The

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