Majority of global investors prioritising transition risks

Almost 70% of global investors say the energy transition is “unstoppable” and now view sustainability as central to their investment approach, according to a survey carried out by IFM Investors.

For its PM700 report, the group asked 700 senior investment professionals across 18 countries about the latest private markets investment trends. It found 69% said the energy transition will advance in spite of any policy changes and amid the varying regulatory landscapes and risk appetites across regions. They seek to have a greater direct influence and contribution to the shift to a low-carbon economy with their investment portfolios. More than two thirds said they were drawn to energy-transition focused infrastructure funds.

Some 70% said sustainability is an integral part of their private market strategies, and more than seven in 10 (72%) investors are prioritising climate and transition risks, while more than two thirds (67%) of investors prioritise biodiversity and nature-related risks.

See also: Rathbones’ Harrison: ‘Three pillars driving sustainable change’

Maria Nazarova-Doyle, global head of sustainable investment at IFM Investors, commented: “The energy transition is reshaping the investment landscape, creating both unprecedented opportunities and new risks. Investors who can navigate this shift — by allocating capital to sustainable infrastructure, supporting decarbonisation of existing assets, and engaging actively with companies — will be best positioned to deliver long-term outcomes.

“It’s incredibly positive to see that sustainability continues to feature heavily in investor thinking — it’s at the heart of private market strategies, with the majority of institutional investors making it central to their approach. From managing climate, biodiversity and nature-related risks to seizing opportunities in the energy transition, investors worldwide see sustainability as a key driver of long-term performance and risk management, regardless of regional differences in regulation or risk appetite.”