Monday, February 11, 2008

How a climate change fund works

From Business Green, an interview with Rick Stathers, environment analyst for Schroder's Global Climate Change fund, about climate change as an investment theme. One interesting point is that many of the funds being created by large investments aren't billed as "socially responsible investing" vehicles.

As a result, Stathers' fund readily invests in nuclear energy, for example. A good thing to know, if (like me) you believe that nuclear power plants are a mirage, as far as carbon-cutting goes: ... We look at which companies will be impacted by the need for society to adapt to climate change. With the mitigation argument we look to see how themes such as energy efficiency, for example, will impact them and their level of exposure to them. In the oil and gas sector, there will be some companies with higher sectors of gas in their portfolio – we might be far more positive to them because gas is a lower carbon fuel than oil. Then there's also the adaptation argument, which is a harder play because it has a medium term/longer term focus....We're positive on companies with exposure to nuclear power and generally are focusing on those manufacturing companies that make materials for nuclear power plants rather than nuclear plants themselves.

Photo of the Civaux nuclear center in the Vienne, in France, by Archeos, Wikimedia Commons

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