UK ‘green’ funds to raise global temperature three times beyond 1.5°C target

‘Green’ funds too are contributing to the climate crisis, pushing temperature rises past 3°C, according to Clim8.

Yet two thirds (66%) of British investors do not know where their money is going or if their investments are sustainable.

Clim8 benchmarked the climate alignment of its portfolio against the world’s largest traditional funds as well as climate-focused funds.

The research, gathered using data and algorithms from Carbon4Finance (C4F), took into consideration the portfolios of 8,000 companies.

Looking specifically at who these funds invest with, Clim8 was able to align where investors’ money was being distributed and whether it contributes positively to the climate.

Vincent Gilles, Clim8’s chief investment officer, said: “Investors are increasingly looking to direct their funds towards companies that are making positive social or environmental impacts in the world.

“Unfortunately, as our research demonstrates, if you are investing in a financial product like a pension or stocks and shares ISA with a major high street bank or other financial institution, the chances are your money is being used to contribute to the climate crisis.”

Concerns about greenwashing are a worry for 44% of investors, making it the biggest concern when it comes to responsible investing. Recently, HSBC drew criticism from the Advertising Standards Authority (ASA) over how the bank depicts its role in the climate crisis. A series of adverts at bus stops led customers to believe the bank was making a “positive overall environmental contribution as a company”, a ploy that could influence decisions around financial products.

HSBC’s annual report disclosed that current financed emissions were equal to 35.8 million tonnes of carbon dioxide each year for its oil and gas financing alone

Gilles added: “While the industry talks a good game when it comes to climate – with some shifts to divesting from fossil fuels and other environmentally harmful industries – many of the world’s most dominant funds still aren’t making the kind of sweeping, progressive change that is urgently needed.”

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