New initiative to help investors funnel $10bn into climate solutions annually

Depending on the individuals' net-worth

Yan Swiderski and Jasper Judd – two former fund managers – have teamed up to launch a new initiative aiming to encourage individual investors across the globe to make this change within their portfolios. Called the Global Returns Project, the initiative claims the $10m per year could be met if just 3% of people with savings made the transition.

The Project is working with financial institutions to help them give clients the chance to move 0.25% of their portfolios to back charities like Ashden, ClientEarth, Global Canopy, the Rainforest Trust and Trillion Trees.

It says it has chosen non-profit partners on the basis that they are addressing problems “that have no market solutions” at present, and that they are delivering net-positive benefits across the environmental and social agenda.

“Funding not-for-profit climate solutions yields returns just like any other investment; the returns are externalised and shared, but they are real, identifiable, and global,” Swiderski said.

“Financial institutions are ready and willing to tackle the climate crisis. Individuals can help them make this small change which will have a huge effect.”

Changing finance landscape

On the institutions piece, recent weeks have seen new climate commitments launched by the likes of HSBC and Morgan Stanley. A science-based target setting framework for the financial sector has also been finalised.

As for individuals, a YouGov survey of 4,000 UK-based adults with savings or pensions found that 72% do not know whether their money is invested in line with their environmental and social values. But the pandemic seems to have amplified the trend towards sustainable investing from individuals, particularly as MPs will soon be voting on the Pension Schemes Bill.

Research published this week by Barclays, Campden Wealth and GIST found that global high-net-worth investors are planning to increase their impact investing allocation sharply over the next five years. At present, this cohort has collectively allocated 20% of its capital in this way. This proportion could rise to 35% by 2025.

This forecast was reached based on a survey of more than 300 individuals with an average net worth of $876m. Nine in ten of the respondents said they consider climate change when making investment choices and two-thirds said they will be broadening their approach to risk in the coming years as a result of Covid-19 and environmental concerns.

“Wealth holders see the challenging state of the world, and the risks and vulnerabilities both individuals and businesses face due to COVID-19 and climate change, and they want to act,” Campden Wealth’s director of research Dr Rebecca Gooch said. “Here is where smart investment and deep pockets can make a real difference in impact and ESG investment. For many, responsible investing is not only the ethical thing to do, but it is simply good business practice.”

More broadly, calls are mounting for every single financial decision made globally to be made with the climate and nature crises in mind. Former Bank of England Governor Mark Carney has said he will make this a core focus of his work at COP26, both in standalone interviews and through his appearance in WWF’s new Our Planet: Too Big to Fail documentary.

Sarah George