In this summer series for ESG Clarity, members of the sustainable investment industry tell us how their thinking on this fast-moving industry has adapted over the years and what changes that has led to.
Here Victoria Hasler, head of fund research at EQ Investors, discusses how the heatwaves and floods seen around the world recently has caused her to think differently about her work and personal life.
What has ESG or sustainable investing changed your mind about over the past couple of years?
I’m a big believer in climate change mitigation. The science on climate change is irrefutable and, whilst we all know that weather patterns may show low correlation to climate change in the short term, the visible evidence of climate change is mounting. This summer has been a classic example with scorching heatwaves across much of Europe and the US, and devastating wildfires which have caused huge economic losses and, in many cases, tragic losses of life. I think there are few who would now argue that climate change isn’t real.
So then we enter an interesting debate about how best to slow, stop and perhaps even eventually start to reverse the catastrophic consequences of human-induced climate change, as well as a fascinating (albeit often fairly demoralising) discussion about whether we have now reached a tipping point where limiting post-industrial global temperature rises to 1.5 degrees is even possible any more, or whether we should abandon that goal and aim for 2 degrees.
See also: – Staycation with EQ’s Victoria Hasler: Hiking in Scotland and leaving no trace
Either way, many of the funds in which we invest at EQ seek to address climate change migration goals by investing in both environmental solutions and companies leading the way in reducing emissions in their own operations.
Lately, however, I have been thinking about something else. If we are well on our way to a world where temperatures are, at best, 1.5 degrees above pre-industrial averages, it seems certain that our planet is set to change. Hotter summers, wetter winters, higher wind speeds (to name but a few) will be natural consequences of the changes we have inflicted upon the world. In which case, whilst it is still vital to invest in climate mitigation to limit any further temperature rises, should we also be focusing more on investing in climate change adaptation and resilience?
There is no doubt in my mind that, to preserve anything like the way of life that we are used to, many things will have to change. Some of these might be easy, and relatively cheap. For example, painting buildings and, particularly, roofs in light colours reflects heat and keeps buildings cooler. This is already commonplace in warmer parts of the world, and something that could offer a sensible solution in previously cooler locations too.
Other solutions may be more complicated. Do we need to re-engineer train lines, so they don’t melt in extreme heat? Re-design cities with green borders to pavements? (This could help in wetter winters by allowing rainwater to drain naturally into the water table and lessening flooding.) What are the consequences of extreme heat and increased flooding on our electricity grids? Are they robust? How do we go about making them more so? It seems obvious that transforming our economy into one that is resilient to the effects of climate change will take considerable investment. It is vital that we do so, however, as studies have shown, time after time, that if we don’t it is the most vulnerable who suffer the most.
Describe one thing about ESG or sustainable investing you’ve heard recently that has stuck with you, or been particularly poignant.
According to an article published by the LSE, while 32% ($15.5bn) of all private finance mobilised by official development interventions between 2018 and 2020 targeted climate-related issues, only 4% ($1.8bn) was earmarked exclusively for adaptation. This has stuck in my mind partly because of the scale of the problem, but also because spending on adaptation can make real differences to all our lives in the short term as well as for years into the future.
What changes have you made personally this year to become more sustainable?
I’m trying not to shy away from this in my personal life either. Whilst it can seem impossible for any individual to impact climate change adaptation, as with mitigation there are small things that we can all do which will help us a bit. I’m getting better at checking the weather forecast each evening and making sure I close the curtains before the sun comes into a room and not when it has become unbearably hot. I’m planning my holidays for cooler regions to avoid heatwaves, and, where I can, I’m re-arranging my days to avoid going out in the hottest part. Not that it has been so much of a problem in London this summer, but I have no doubt that hotter weather will return even here at some point, and practice makes perfect!
