ESG Telegraph
  • Home
  • Latest News
  • Environment
  • Companies
  • Investors
  • Governance
  • Markets
  • Social
  • Regulators
  • Sustainable Finance
Featured Posts
    • Companies
    European office market faces biggest test since financial crisis
    • August 15, 2022
    • Markets
    Uniper drops coal case as tensions rise over treaty on fossil fuel projects
    • August 15, 2022
    • Latest News
    Stock markets subdued after weaker than expected Chinese data
    • August 15, 2022
    • Companies
    Vanguard active funds suffer bloodiest first-half on record
    • August 15, 2022
    • Markets
    Why the Fed might be at ‘neutral’ already on monetary policy
    • August 15, 2022
Featured Categories
Belarussia
View Posts
Companies
View Posts
Energy
View Posts
Environment
View Posts
Food
View Posts
Governance
View Posts
Health
View Posts
Investors
View Posts
Latest News
View Posts
Markets
View Posts
Potash
View Posts
Regulators
View Posts
Russsia
View Posts
Social
View Posts
Supply Chain
View Posts
Sustainable Finance
View Posts
Technology
View Posts
Uncategorized
View Posts
ESG Telegraph ESG Telegraph
7K
9K
4K
1K
ESG Telegraph ESG Telegraph
  • Home
  • Latest News
  • Environment
  • Companies
  • Investors
  • Governance
  • Markets
  • Social
  • Regulators
  • Sustainable Finance
  • Markets

Aviva Investors chief warns over rush into ‘overpriced’ green stocks

  • February 15, 2022
  • Staff
Total
0
Shares
0
0
0

Green stocks are often overpriced and can offer investors limited scope for making a positive impact on the environment, the chief executive of Aviva Investors has argued.

“I believe that as a general strategy, buying brown and helping it to become green will deliver better investment returns, and it doesn’t matter what asset class you’re talking about,” Mark Versey told the Financial Times.

The investment arm of the UK-based insurer, which has £263bn in assets under management, considers sustainable investment the “North Star” principle guiding the company, and has been vocal about its intentions to vote against bosses who do not shape up on climate, human rights and biodiversity.

But the rush among asset managers to adopt sustainable investment has created pockets of extreme overvaluation, and is tilted too heavily in favour of stocks over debt, said Versey.

“You can buy some green assets today which are frankly overpriced,” he said.

Shares in electric vehicle company Tesla have gained more than 1,500 per cent in the past five years, while electric truckmaker Rivian is valued at $59bn since listing in November, despite producing only about 1,000 vehicles in 2021.

Interest in sustainable investing has exploded over the past few years, with assets in these strategies hitting a record $3.9tn in the third quarter of 2021, according to data from Morningstar.

But opinion is still divided over whether it is appropriate for sustainable investors to buy oil stocks, for example. Advocates say it is a meaningful way to push for change. Others warn it is often ineffective and that, ultimately, their business models are unsustainable, while some hedge funds have snapped up unloved fossil fuel stocks on the cheap.

“Defining what might be sensible as an investment definitely depends on the timeline. The longer the timeline, the less it makes sense to be holding truly brown assets [because] these are going to wind up being stranded assets,” said James Alexander, chief executive of the UK Sustainable Investment and Finance Association. “What’s good for the world is providing capital flows to green and transitioning assets, but what we really need to see is all investors being really active stewards of capital.”

Versey said investors should be acting as advocates across all asset classes.

“If you’re a bondholder you’ve got a huge voice, you could argue a louder voice because corporates are continually refinancing their operations, so if the cost of capital changes it actually hits the bottom line much sooner than the share price,” he said. “Share price affects the management incentive plan . . . whereas corporate [bonds] affect the borrowing costs.”

Earlier this month, Aviva Investors wrote to 36 finance ministers, including the top officials in the UK and US, asking them to adopt global climate disclosure standards and to raise 2030 national climate targets.

Policymakers including Mark Carney, former Bank of England governor, and François Villeroy de Galhau, France’s central bank chief, have said that failure to address climate impacts could wipe out as much as $20tn in assets globally.

Video: What does ESG-friendly really mean?

Moral Money

Moral Money is our twice weekly newsletter covering sustainable business, finance and investing. Sign up here for breaking news and insightful analysis on this bubbling revolution.

Total
0
Shares
Share 0
Tweet 0
Pin it 0
You May Also Like
Read More
  • Markets

Uniper drops coal case as tensions rise over treaty on fossil fuel projects

  • Staff
  • August 15, 2022
Read More
  • Markets

Why the Fed might be at ‘neutral’ already on monetary policy

  • Staff
  • August 15, 2022
Read More
  • Markets

Live news updates: Afghanistan marks a year of Taliban control

  • Staff
  • August 15, 2022
Read More
  • Markets

Saudi prince made $500mn Russia bet around start of Ukraine war

  • Staff
  • August 14, 2022
Read More
  • Markets

DR Congo opens oil and gas auction round to carbon credit and crypto groups

  • Staff
  • August 14, 2022
Read More
  • Markets

Did UK inflation pick up in July?

  • Staff
  • August 14, 2022
Read More
  • Markets

Storied City institution M&G looks ripe for a break-up

  • Staff
  • August 14, 2022
Read More
  • Markets

Asset managers curb pay amid rising cost pressures

  • Staff
  • August 14, 2022

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Featured Posts
  • 1
    European office market faces biggest test since financial crisis
    • August 15, 2022
  • 2
    Uniper drops coal case as tensions rise over treaty on fossil fuel projects
    • August 15, 2022
  • 3
    Stock markets subdued after weaker than expected Chinese data
    • August 15, 2022
  • 4
    Vanguard active funds suffer bloodiest first-half on record
    • August 15, 2022
  • 5
    Why the Fed might be at ‘neutral’ already on monetary policy
    • August 15, 2022
Recent Posts
  • Rio Tinto rebuffed in plan to take control of Mongolia copper project
    • August 15, 2022
  • Digital advertising: Apple takes bigger bite of new business
    • August 15, 2022
  • At 75, India is finally ready to join the global party
    • August 15, 2022

Sign Up for Our Newsletters

Subscribe now to our newsletter

ESG Telegraph
  • Home
  • Privacy Policy
  • Guest Post
  • Contact

Input your search keywords and press Enter.