Pandemic-induced boost to fight climate change opens investment opportunity

TORONTO, CANADA – 2021 is on track to be the biggest year yet in the global fight against climate change as the COVID-19 crisis has spurred worldwide political support for the “build back better” movement.

Massive amounts of government spending earmarked for 2021 to support both the economy and new, ambitious net-zero emissions targets have positive implications for investors say two Toronto-based investment professionals, who were recently certified as global Sustainability and Climate Risk (SCR™) experts.

Catherine Ann Marshall, SCR, Principal Consultant at RealAlts, and Tania Caceres, SCR, Principal at Risk Nexus are among the first professionals globally to earn the SCR credential making them members of an elite network of sustainability thought leaders, according to the Global Association of Risk Professionals (GARP). The pair say that many government investment initiatives to push a “green recovery” will also provide attractive new investment opportunities to the private sector.

The latest action to unleash government funds is expected today as the European Parliament votes on the 2021 portion of the multi-year €1.82 trillion European Green Deal Investment Plan. The Plan has a binding target of reducing greenhouse gas emissions by 2030 by at least 55% from the 1990 level.

This Plan follows other recent spending announcements by Canada and the UK, and expectations that president-elect Joe Biden will convene a climate summit within his first 100 days in office. All of these developments added to the momentum in 2020 to fight climate change. More than 110 countries, including major greenhouse gas emitters China, Japan and South Korea, have now committed to becoming carbon neutral by mid-century, according to the United Nations.

Last week the Canadian government unveiled its C$15 billion multi-year green recovery plan which focuses on energy retrofits for real estate, clean transportation, annual increases in the carbon tax until 2030, and support for green industry and nature-based climate solutions. This came on the heels of the announcement of a binding net zero target for Canada by 2050.

Since the summer, and as recently as this month, the UK government made a series of announcements targeting a 68% cut in carbon emissions by 2030 supported by almost ₤7.4 billion in green recovery initiatives, with more spending to come in future. The UK pledged in 2019 to achieve net zero emissions by 2050.

“These announcements mean governments are taking action to protect against the physical risks of climate change, but they will result in companies facing transition risks as the economy moves away from fossil fuels,” said Ms. Caceres, who has 20 years of experience managing real estate investment risk across Canada and Europe. “The good news is that the transition will open up many new investment opportunities” she said.
“For instance, the UK government has announced it will partner with private infrastructure investors on green investments such as railroads,” said Ms. Marshall, a real assets expert with 20 years of investment experience. “Other new investment opportunities will include clean energy production and energy retrofits for real estate. These investments have a history of producing solid income returns, and in this low yield environment, they are a welcome opportunity.”

With extensive experience as institutional investment professionals in real assets, the pair are uniquely positioned to recommend how to invest sustainably in real estate and infrastructure.

In bestowing the SCR certificate to Ms. Marshall and Ms. Caceres, GARP said “the SCR distinction makes you one of the area’s first subject matter experts, joining you with an elite network of thought leaders.”

The Global Association of Risk Professionals Sustainability and Climate Risk program, launched in 2020, is a global certification that tests candidates’ ability to apply a range of knowledge and skills critical to managing sustainability and climate risks in a financial context. The curriculum builds a comprehensive and global understanding of the facts, challenges, and issues related to ESG. It equips SCRs to become climate risk leaders by enhancing their skills to effect organizational change and to integrate sustainability standards into investment processes. GARP’s certification programs are recognized by the financial industry worldwide.

About Tania Caceres: Tania leads Risk Nexus, a global real estate consulting firm launched in 2014 specialized in ESG strategy, integration, and risk management. It serves large corporate clients including leading Canadian and European REITs, pension funds, and global investment managers.

About Catherine Ann Marshall: Catherine leads RealAlts, an independent investment consulting firm focused on advising institutional investors on global real assets. Launched in 2008, RealAlts advises both asset owners such as pension funds and insurance companies as well as investment managers.