Investors

There are glass-half-empty and glass-half-full ways to view renewable energy and climate finance in Africa, the second largest and most populous continent. The somber take: Africa and its countries are not even close to being on track to achieve the Paris Agreement or their own climate goals — their contributions to limiting global warming to 1.5 degrees Celsius or 2.7 Fahrenheit — before 2030. The Climate Policy Initiative estimated the continent will require $277 billion of renewable energy investments each year from 2020 to 2030 to meet its goals and that isn’t happening. There is currently only $29.5 billion invested, a shortfall that will ultimately hamper the collective effort to avoid profound environmental problems and keep the earth livable. “It is unlikely that global climate change mitigation efforts can be successful without taking Africa into consideration,” Pieter Scholtz, the ESG Africa partner lead at KPMG, said i...

About 10 years ago, a very thick book written by a French economist became a surprising bestseller. It was called “Capital in the 21st Century.” In it, Thomas Piketty traces the history of income and wealth inequality over the past couple of hundred years. The book’s insights struck a chord with people who felt a growing sense of economic inequality but didn’t have the data to back it up. I was one of them. It made me wonder, how much carbon pollution is being generated to create wealth for a small group of extremely rich households? Two kids, 10 years and a Ph.D. later, I finally have some answers. In a new study, colleagues and I investigated U.S. households’ personal responsibility for greenhouse gas emissions from 1990 to 2019. We previously studied emissions tied to consumption – the stuff people buy. This time, we looked at emissions used in generating people’s incomes, including investment income. If you’ve ever thought abo...

Over recent months there has been an orchestrated pushback against investors and insurers who integrate the risks of climate change into their business models. That pushback – emanating from Republican-led states – is having an impact on how companies speak publicly. But whether it will affect their efforts to respond to climate change is less clear. The latest targets have been global insurance companies, and their responses offer some insight. Under pressure, several major insurers, including AXA, Allianz, Lloyd’s and Swiss Re, have pulled out of a United Nations-organized alliance committed to a global goal of net-zero emissions by mid-century. There’s a word for companies going quiet in the face of orchestrated attacks: “greenhushing.” But while the insurers’ departures from the alliance might look like a victory for politicians and political donors who want to delay action on climate change, the companies say leaving doesn’t...

The Federal Reserve raised interest rates again on May 3, 2023, by a quarter point, making it the Fed’s 10th rate hike since March 2022 in an ongoing fight to tame inflation. These rate hikes have been reverberating through the economy, raising prospects of a recession amid heightened concerns about the fragile state of banks. The rate hikes are also rattling sustainability-focused investing, better known as ESG investing. The trend toward ESG investing, which puts pressure on companies to meet environmental, social and governance benchmarks, has almost redefined asset management over the past decade. ESG funds today are a multitrillion-dollar market. However, the high uncertainty around interest rates today, along with the prospects of a looming recession and a political backlash, has put the future of ESG investors at a crossroads. I specialize in sustainable finance, and my recent work has documented the impact that tough economic times can have on ESG investing dema...