Net ZeroInsights

Why investors should consider decarbonising their portfolios

By July 5, 2022October 20th, 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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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 Any potential investor should consider the relevant PDS before deciding whether to acquire, or continue to hold units in, a fund.

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