ESG: Sustainability trends remain strong regardless of energy spike
Underlying trends toward decarbonisation and sustainability remain strong regardless of the surge in traditional energy stocks, according to Victoria Maclean, Associate Fund Manager for the Pengana WHEB Sustainable Impact Fund, who was visiting Australia for Pengana’s recent Conscious Capitalism event.
“The case for sustainable solutions such as wind and solar has only strengthened in the long term, even if short-term performance has not been able to keep up with hard running energy stocks.
“The Ukraine conflict has contributed to this huge spike in energy price rises, but it might also be seen as a catalyst to accelerate the shift towards sustainable, renewable energy sources.
“Europe is already speeding up its decarbonisation programs, and renewables capacity. There are some well-acknowledged headwinds regarding red tape, particularly in issuing permits for renewables. But it’s widely accepted that Europe needs to speed up its adoption of renewables to meet emissions targets.”
Ms Maclean said sustainability must be more than a ‘box ticking’ exercise. “For Pengana, WHEB and our investors, sustainability is about creating deep structural changes in the global economy that are already driving asset prices.
“Investors are driving the ESG push, just as consumers switched to fairly-traded chocolate and free-range eggs in the 1990s and 2000s. Investors now demand portfolios that help drive positive change in the world around them, or at the very least avoid making things worse.”
The push toward ESG investments has increased dramatically since 2020, and since this time the Pengana WHEB Sustainable Impact Fund has seen funds under management grow over five-fold from A$49m to A$269m.
