Let’s make finance sustainable (DWS)

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The asset-management industry plays many roles. An increasingly important one is contributing to the greening of the financial system. This means integrating environmental, social and corporate-governance (ESG) and long-term-sustainability issues such as climate risk into investment strategy, risk management, asset allocation, governance and stewardship activities. Investing in good corporate citizens can make a lot of financial sense. For instance, in the age of Twitter and consumer boycotts, it is worth thinking about all these issues before a company, which you may be invested in, is faced with a troublesome situation.

Financial regulators around the world are increasingly focusing on financial institutions’ capabilities, preparedness and actions to manage climate-change and broader sustainability risks. The idea is to support investment in low-carbon and resource-efficient technologies and to foster a longer-term outlook. This trend gathered momentum in September 2015 when Bank of England Governor Mark Carney described climate change as a threat to financial stability. The same year, the G20 created a private-sector taskforce led by Michael Bloomberg. It recommended how companies and financial institutions should improve climate-related financial disclosures.

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In the midst of a global pandemic, Apple announced one of the corporate world’s most ambitious environmental blueprints – to reduce the climate impact of every Apple device to net zero by 2030. The plan involves cutting 75 per cent of the company’s existing carbon footprint, not only for its own business but also across the manufacturing supply chain and product life cycle.

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