Addressing net zero challenges needs a mindset shift in the investment sector, a new report has found.
The Chartered Financial Analyst Institute has published a report based on the views of 20 leading investment professionals and experts.
The report, Net Zero in the Balance: A Guide to Transformative Industry Thinking, stressed the importance of mindset shifts and innovative strategies to achieve net zero.
CFA president, Margaret Franklin, said: "Addressing net zero within a system focused on investment risk and return represents an extraordinary challenge.
"As a global industry, new thinking and tools are needed to meet the unprecedented complexity and scale of the problem."
She said determining a road map to net-zero is challenging and investors are looking for tools to help them to support their efforts.
The research identified three critical areas of successful net-zero investing. These were:
- The role of organising frameworks to adapt to the big shift in the investment ecosystem
- The role of innovations for integrating net-zero investing into mainstream investing
- The careful balance of investment strategies
- Investment strategies for net-zero investing must balance net-zero goals with risk and return goals
Paul Andrews, managing director for research, advocacy, and standards at the CFA added: "The systemic barriers to achieving net zero remain deeply entrenched.
"Acknowledging that investment objectives ultimately lie with the end client, we seek to support investors considering net zero by researching, delivering, and advocating for the knowledge, skills, tools, practices, and abilities needed to analyse and act on the financial risks and opportunities associated with climate change and the net-zero transition."
Andrews hopes the guide will contribute to the ongoing conversation around net-zero investing.
tara.o'connor@ft.com
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