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Why investors should consider decarbonising their portfolios

By July 5, 2022July 21st, 2022No Comments


Edited Video Transcript:

Plato Investment Management thinks that investors should decarbonise portfolios for a couple of reasons. The first of which is that investors are starting to realise, probably for the first time in history, that the carbon footprint of their investing actually dwarfs the carbon footprint of their day-to-day activities. And I’ll give you a great example of that, the carbon footprint of a typical self-managed super fund is actually 71, would be the equivalent of flying Sydney to Melbourne 71 times. So it is really a big number. It would take a thousand trees to remove that much carbon from the atmosphere. So people think about ‘How can I do my bit for the environment? Should I take one less overseas holiday a year?’ They’d actually be much better served and have a much greater impact by investing in a way that does decarbonise.

The second reason is that if you look at the experience of other countries and other regions around the world, particularly Europe, that are much further down the road in this decarbonisation journey, for example they introduced their emissions trading scheme over a decade ago. By 2030 you won’t even be able to buy a traditional internal combustion vehicle in the UK. What you’ve seen is that in Europe companies with lower emissions that are getting ahead of regulation, that are getting ahead of changes in consumer habits, have done far, far better in terms of their stock price performance than high emissions companies that are, to a large extent, stuck in the past.

So there’s really two reasons. There’s the societal impact where we can really be agents for change. But there is also a performance benefit, a tailwind if you like, by investing in companies that are looking to the future not the past.

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DISCLAIMER:

This document is prepared by Plato Investment Management Limited ABN 77 120 730 136, AFSL 504616 (‘Plato’). Pinnacle Funds Services Limited ABN 29 082 494 362, AFSL 238371 (‘PFSL’) is the product issuer of the Plato Australian Shares Income Fund (‘the Fund’). The Product Disclosure Statement (‘PDS’) of the Fund is available at https://plato.com.au/. Any potential investor should consider the relevant PDS before deciding whether to acquire, or continue to hold units in, a fund.

Plato and PFSL believe the information contained in this document is reliable, however no warranty is given as to its accuracy and persons relying on this information do so at their own risk. This communication is for general information only and was prepared for multiple distribution and does not take account of the specific investment objectives of individual recipients and it may not be appropriate in all circumstances. Persons relying on this information should do so in light of their specific investment objectives and financial situations. Any person considering action on the basis of this communication must seek individual advice relevant to their particular circumstances and investment objectives. Subject to any liability which cannot be excluded under the relevant laws, Plato and PFSL disclaim all liability to any person relying on the information contained in this communication in respect of any loss or damage (including consequential loss or damage), however caused, which may be suffered or arise directly or indirectly in respect of such information.

Any opinions or forecasts reflect the judgment and assumptions of Plato and its representatives on the basis of information at the date of publication and may later change without notice. Any projections contained in this presentation are estimates only and may not be realised in the future.  The information is not intended as a securities recommendation or statement of opinion intended to influence a person or persons in making a decision in relation to investment. Past performance is not a reliable indicator of future performance.

Unauthorised use, copying, distribution, replication, posting, transmitting, publication, display, or reproduction in whole or in part of the information contained in this document is prohibited without obtaining prior written permission from Plato. Plato and their associates may have interests in financial products mentioned in the presentation.

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