ESG
Private Capital Big Part Of Climate Change Struggle - Study

In the story about dealing with human-caused climate change, the importance private capital - as opposed to public equities - is well understood by family offices, a report finds.
A study of ultra-high net worth individuals and family offices,
drawn from more than 300 responses globally, finds that the vast
majority (86 per cent) see private capital as essential in
tackling climate change, alongside actions from governments and
companies.
The majority (80 per cent) of wealth holders said climate change
is a relevant factor in the decisions they make for their
investment portfolio, with 67 per cent saying they would like
their family portfolio to meet the requirements of the Paris
Agreement.
The report, Global Impact: A Power for Good, now in its
eighth year, is issued by Barclays Private
Bank and Campden Wealth. The respondents, coming from 33
countries, have an average of $833 million assets under
management.
Despite recognising the action required, there is some concern
over the public and private sector’s ability to solve climate
issues. Eight in 10 (79 per cent) agree that governments’
pandemic stimulus packages should prioritise green investment and
the transition to a low carbon economy. Only 50 per cent believe
that it is possible to keep the global average temperature
increase below 2C, the report said.
At the same time, they would like to see governments and
wealthier nations doing more. Nine in 10 (89 per cent) believe
that governments should do more to meet the Paris Agreement, and
61 per cent have expressed a concern that this year’s United
Nations Climate Change Conference (COP26) will not make
sufficient progress to fully address climate change. Similarly,
71 per cent believe that developed countries, in particular,
should be increasing their financial commitment to developing
countries and to the solutions to avoid the acceleration of
climate change.
Almost six in 10 (59 per cent) allocate capital directly to
companies, projects, and real assets, while 41 per cent of
portfolios invest via an indirect strategy created and run by
asset managers and other intermediaries.
“Climate change is the next, and larger, systemic challenge we
have to face globally. It is encouraging that leading global
wealth holders are seeking to play a role in this fight. From our
conversations, I hear them express both a responsibility and an
opportunity to use their capital at this pivotal point,” Damian
Payiatakis, head of sustainable and impact investing, Barclays
Private Bank, said.
“While we see heightened awareness, action does not always
immediately follow. Moreover, navigating the rapidly growing
green investment market is increasingly difficult. So we’re
having to work more to help individuals and family offices
articulate the impact they want to make; and then find
high-quality investments that will actually contribute to the
solutions to counter climate change as well as target the returns
they want,” he added.