Changes surrounding climate change will be the world’s ‘third revolution’, according to Fidelity global head of stewardship and sustainable investing Jenn-Hui Tan.
At the 2020 World Economic Forum (WEF) in Davos, the five biggest global risks in terms of likelihood were all themed around climate change. These were extreme weather events, failure of climate change mitigation, human-made environmental damage and disasters, major biodiversity loss and ecosystem collapse and major natural disasters such as earthquakes and tsunamis.
This contrasted to WEF’s biggest global risks in 2015 which were mostly geopolitical and included interstate conflicts, failure of national governance and state collapse or crisis instead of environmental issues.
Tan said he felt sustainability had been given a ‘turbo charge’ in Australia from the recent bushfires and floods and that the climate change situation had reached a ‘tipping point’.
Tan said: “We have only had the agricultural revolution and the industrial revolution so far, now we are seeing the third which is the climate change revolution. There has been a very dramatic step change and problems regarding climate have overtaken economic problems.
“A myth of climate change is people think some big moon shot is required, some big technological advancement, but if you look around then I think they are there already. What it is about now is the political will to implement it at scale across society.”
He said he was beginning to see more engagement, particularly by super funds, on environmental, social and governance issues.
“Super funds are engaged with corporates to give their views on issues or becoming engaged with Fidelity and sharing their views on how they want to vote. They are far more active than before. These issues cover a whole gamut from climate change to fossil fuels to tobacco,” he said
This was echoed by Mirova fund manager Jens Peers who said super funds were taking increased interest in “how ESG can be done properly”.