Growing Investor Appetite for Low Carbon Related Investments, HSBC Research

12 Sep Growing Investor Appetite for Low Carbon Related Investments, HSBC Research

New research commissioned by HSBC shows that 68% of global investors intend to increase their low-carbon related investments to accelerate the transition to a clean energy economy. Growing investor appetite for low carbon investments is strongest in Europe (97%), the Americas (85%) and Asia (68%). The Middle East (19%) is the only region to experience an annual decline in this trend.

The research, conducted with a thousand companies and institutional investors globally, shows that institutional investors are demanding companies improve levels of climate-related disclosure. Companies are responding to these demands, but not nearly fast enough given 56% of investors describe current disclosure levels as ‘highly inadequate’. This trend is most pronounced in Europe (76%), followed by the Americas (66%), Asia (50%) and the Middle East (30%).

Despite 53% of companies now having an environmental strategy in place, only 43% actively disclose it. Europe again leads the way (64%) but it is Asia that registers the largest increase in both environmental strategy disclosure and the level of climate related disclosure. Today, 28% of all Asian companies disclose their environmental strategy, up from 19% in 2016, and 46% are increasing their level of climate related disclosure (up from 23% last year).

One factor inhibiting companies increasing their disclosure levels is the lack of any clear competitive advantage from doing so, specifically with regard to the cost of funding. The main drivers of increased transparency are investor pressure (83%) and international regulation (77%).

The survey was conducted by industry research firm East & Partners over a four week period, ending 11 July 2017. It surveyed the Group Treasurers and CFOs of 507 corporates and the Chief Investment Officer, Head of Portfolio and Head of Investment Strategy of 497 investment houses, with an even geographical split between Europe, the Americas, Asia and the Middle East.

Full report available here.