From Morningstar: 2024-11-11 10:45:24

COP29, the United Nations-sponsored climate conference, is happening in Baku, Azerbaijan, focusing on a “Solidarity for a Greener World.” Investor interest in sustainable funds may be down, but climate risks remain a concern impacting financial returns and the planet. Many companies lack credible climate transition plans, especially in high-impact sectors.

Most global companies are significantly misaligned with the Paris Agreement’s goal of limiting global warming to 1.5°. Sectors like energy, transportation, and construction are major contributors to misalignment. The energy sector alone is responsible for over three-quarters of global greenhouse gas emissions, with China and the US being the top polluters.

Despite the popularity of environmental themes, sustainable funds are facing a decline in investor interest, with significant outflows. Regulation is crucial in the fight against greenwashing, with new ESG fund naming rules aiming to protect against misuse. Morningstar will focus on sustainable investment issues during COP29.

Throughout the week, Morningstar will cover various topics related to sustainable investing, including the best-rated funds, ETFs, and stocks in sectors like hydrogen and wind. Undervalued securities in ESG funds will also be highlighted. The authors do not hold any shares in the mentioned securities.



Read more at Morningstar: Special Report Week: Sustainable Investing and COP 29