Weather fear triggers rush for ethical investments

SHAREHOLDERS more than trebled their ethical investments last year, according to analysts Impactvesting.

Inflows for UK funds focusing on environmental, social and governance (ESG) issues jumped from £3 billion to £10 billion in 2019.

ESG funds have become increasingly popular as investors become more concerned about climate change, poverty and poor company directors. Many investors are targeting firms with a good record on the climate crisis in order to protect workers’ pensions from the effects of global warming.

The world’s largest asset manager, US giant BlackRock, said last week it would increase the money it ploughs into sustainable funds from £68billion to £760billion.

The organisation plans to vote against bosses who are not responding to climate change.

BlackRock chief Larry Fink said climate fears were driving ‘a fundamental reshaping of finance’. He warned that lenders may stop offering mortgages on houses at risk from flooding and he pointed out that inflation would jump if food costs soar due to drought.

Mark Carney, the outgoing governor of the Bank of England, has spearheaded efforts to prepare banks and insurers for flooding, drought and other extreme weather.

Edward Mason, head of responsible investment at the Church Commissioners for England, said: ‘Businesses that do not make sufficient progress accounting for climate risks are already being penalised by the market.’