Climate investing declines amid Trump's anti-clean energy regime

Although investors are withdrawing from climate investing due to uncertainty from the aggressive approach by the US President Donald Trump in his pro-fossil fuels and anti-energy agenda, it opens up opportunities further afield.

Robeco's fifth Global Climate Investing Survey of 300 investors found that 56% believe Trump's energy policies will cause a temporary setback to progress in achieving the net-zero transition, and only 46% of investors (down from 62% a year earlier) said climate change is at the centre or a significant factor in their investment policy.

Key findings also include a drop (57% from 69%) in sentiment to invest more in climate solutions.

Fifty-nine percent said they will wait for the new US policy agenda before making investment decisions involving assets likely affected by Trump's administration.

"Against this, investor majorities in Europe (58%) and Asia Pacific (62%) agree that in future they will be more likely to look outside the US for investments in areas such as climate solutions, transitioning companies and renewable energy," Robeco said.

Another notable theme is the growing concern about the lack of consistent government support for net-zero goals, which is also reflected in an increasingly pessimistic expectation for achieving the Paris Agreement target to limit global warming to below 2 degrees.

"Many feel they have made significant commitments toward achieving net zero by 2050, but that policy frameworks have not kept pace," Robeco said.

"This perceived imbalance is creating uncertainty and prompting calls for more reliable and coordinated action from policymakers."

Further the government support in Europe supporting net zero "remains strong" with only 25% of European investors think there aren't sufficient economic policies as a barrier to decarbonisation, compared to 41% of APAC and 39% of North American.

"This divergence is especially evident in how central climate investing is to strategy," Robeco added.

"Around three-fifths of European (62%) and Asia Pacific (59%) investors still prioritise climate change in their investment policies -slightly reversing last year's results, which had Asia in the lead.

"In contrast, only 23% of North American investors now place climate change at the center of their investment approach.

Robeco climate and biodiversity strategist Lucian Peppelenbos said the survey highlights a "sobering reality".

"... while many investors remain committed to climate goals, the overall prioritisation of climate change in investment strategies is showing signs of decline, particularly at the global level," Peppelenbos lamented.