Only 42% of investors are acquainted with the concept of ‘just transition’, despite 92% highlighting renewable energy as pivotal for its realisation, reveals a new study by Fidelity International.
Conducted in partnership with Coalition Greenwich, the research gathered feedback from over 120 institutional and intermediary investors, analysing the shift from a high-carbon to a low-carbon economy with an emphasis on fairness for all involved.
A notable regional divide emerges from the data. Only 30% of Asian investors claimed awareness of the concept, in contrast to 47% in Europe, underscoring the disparate global viewpoints on sustainable transitions.
Investors also revealed a lack of conviction that, as a society, a ‘just transition’ could be achieved. Indeed, 43% of respondents suggest it is unlikely, while over a quarter of investors (27%) believe the transition will take more than 15 years and 52% believe it will be an ongoing process.
While optimism reigns in certain sectors, with renewable energy, technology & IT and Agrifoods securing interest levels of 92%, 61% and 60%, respectively, the broader sentiment is mixed. In the asset class domain, 89% of participants viewed equities as indispensable, followed by private assets (81%) and thematic investments (66%).
However, the journey to a ‘just transition’ poses challenges. Ambiguous governmental policies are viewed as a significant impediment by 46% of respondents. Prolonged lobbying efforts by entrenched industries for extended pollution allowances concern 29%. Geopolitical tensions (25%), economic downturns (21%) and deep-rooted consumer behaviours (21%) also emerge as barriers.
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