COVID-19 accelerated decarbonisation

Unlike the Global Financial Crisis (GFC), The Australian COVID-19 recovery has caused decarbonisation pressures to accelerate responsible changes in the corporate landscape.

Speaking at a Fidelity webinar, Fidelity portfolio manager, Kate Howitt, said the ‘man versus nature’ aspect of the pandemic may have caused a shift in focus for corporates and the community toward responsible business practices.

“It’s very easy to see confronting a global pandemic as a warmup for the global coordination and the widespread action [that would be required],” Howitt said.

“Everyone’s got to wear a mask during the pandemic [just like] everyone’s got to think about their own carbon footprint.”

This was contrary to the GFC, Howitt said, where concerns such as unemployment trumped environmentalism.

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She said “a lot more companies” had stepped up net-zero commitments and net-zero engagement.

One reason for this, Howitt said, was that companies were incorporating responsible climate strategies into their customer proposition as more customers care about climate change.

Howitt said companies were going down a path akin to Qantas’ incorporation of safety into its branding, whereby environmental, social and governance (ESG) was becoming a selling point.

“There’s not really many other companies that have leveraged outstanding performance and safety into something their customers will value but this is exactly what we’re seeing now with decarbonisation,” Howitt said.

Howitt’s webinar presentation pointed to a few of her portfolio’s holdings to evidence this trend, including Goodman Group.

Goodman Group is a fund manager and developer of industrial properties which the presentation said was engaged in urban infill locations strategies – meaning it builds on vacant lots in urban areas allowing their customers to “reduce their transport related emissions”.