Environmental Education

Investing in climate change leaders, not fence-sitters

A survey conducted by Business Climate International has found that most business leaders are worried about climate change, and believe that their companies have a significant responsibility to tackle the problem and be a part of the climate change solution.

There is an increasing expectation that companies face up to climate change, and already more than half of the world’s 500 largest companies are introducing emission-reduction initiatives with set targets and timelines. Increasingly companies not only recognise the financial risks involved with climate change, but also the commercial opportunities in adopting climate change solutions.

Worryingly there are still significant numbers in the top managerial ranks that have yet to act on adopting climate change solutions and owning their share of responsibility, despite their vocal stance. Some are more fearful of immediate increased costs to the business than the future costs of prolonged droughts, shortages in energy supplies, carbon emission consequences, and declining natural capital. Others don’t know how to implement strategies to manage the opportunities of sustainable practices as well as the risks. Still others lack the attitude required to promote innovation and change, and don’t cultivate a working culture to deliver sustainable results.

In the long run, climate change will affect the demand and supply of commodities, which will have an impact on all sectors of business, particularly the finance, agriculture, tourism and energy sectors.

Many investment fund managers will simply invest your money in the biggest companies, such as oil companies. However, not all of these companies are introducing emission-reduction initiatives, or thinking of long-term energy solutions that are sustainable and low impact on the environment. Yet, there is an increasing demand from investors for assurance that companies in which they invest are doing the right thing by society, and that they are incorporating climate change solutions into corporate strategies.

Ethical investment is concerned with investing in companies that do more than just voice their concerns on climate change is what true. Ethical investment involves seeking investments in companies that are proactive climate change leaders, not fence-sitters. Consideration of environmental, social and economic consequences should be part of business practice, in order to make a real difference to climate change.

Negative environmental consequences aren’t the only considerations in ethical investment – social and environmental benefits stemming from business practices are equally important. These benefits stem from businesses changing their strategies to account for the effects at climate change effects – either by alleviating their emissions, and/or by seeking out business opportunities in renewable sectors.

Society will increasingly require businesses to meet the full environmental costs of production, which is why ethical investors support businesses that are environmentally and financially sustainable. Investing in companies that do not ignore their own environmental responsibilities is also a step in acknowledging individual responsibilities and choices towards climate change solutions.
For more information about ethical investment please visit www.austethical.com.au or call 1800 021 227

By James Thier, Executive Director, Australian Ethical Investment