A new report says a shift in thinking is needed in the investment sector to meet the net zero challenge.
The UK Institute of Chartered Financial Analysts has published a report based on the views of 20 leading investment professionals and experts.
The report, Balancing Net Zero: A Guide to Transformative Industry Thinking, highlights the importance of a shift in thinking and innovative strategies to achieve net zero.
“Addressing net zero within a system focused on investment risk and return is an extraordinary challenge,” CFA president Margaret Franklin said.
“As a global industry, we need new thinking and tools to address the unprecedented complexity and scale of the problem.”
She said determining a roadmap to net zero is difficult and investors are looking for tools to support their efforts.
The research identified three key areas for successful net-zero investments. These are:
- The role of organizational frameworks in adapting to major changes in the investment ecosystem
- The role of innovation in integrating net-zero investments into mainstream investment
- A careful balance of investment strategies
- Investment strategies for net-zero investments need to balance the net-zero target with risk and return objectives.
Paul Andrews, CFA’s managing director of research, advocacy and standards, added: “Systemic barriers to achieving net zero remain deep-rooted.
“Recognizing that the investment objective is ultimately with the end user, we want to support investors considering net zero by researching, providing and promoting the knowledge, skills, tools, practices and capabilities needed to analyse and act on the financial risks and opportunities associated with climate change and the transition to net zero.”
Mr Andrews hopes the guide will contribute to the ongoing debate on net-zero investment.
tara.o’connor@ft.com
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