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Big Investors Cite Climate, Stranded Assets as Top Concerns

Climate change and the risk of stranded assets have emerged as two of the biggest concerns in Tomorrow’s Investment Rules 2.0, Ernst & Young’s second annual survey of more than 200 global institutional investors.

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“Nearly two-thirds of respondents (62.4%) expressed concern over stranded asset risk,” RenewEconomy reports. “More than a third (35.7%) said their funds had divested holdings of a company’s shares in the past year due to the risk of stranded assets, while another 26.7% expect to monitor it closely in the future.”

The survey found that 63.6% of respondents “believe companies do not adequately disclose the environmental, social, and governance (ESG) risks that could affect their current business models,” Vorrath writes. Three-quarters (75.6%) said a risk or history of poor environmental performance would be reason to reconsider a prospective investment.

“There is an enormous opportunity for companies to capitalize on a growing thirst for integrated and value-driven reporting that demonstrates just why their business will create value and provide returns for shareholders in the longer term,” said Dr. Matthew Bell, climate change and sustainability leader for EY Oceania.

“Companies that are able to provide the type of non-financial information that investors want may enjoy greater investor attention and, ultimately, be better positioned to attract and retain investors’ capital.” (h/t to CleanTechnica for pointing us to this story)