We have previously discussed the issue of definition for funds purporting to offer an emphasis on investments in green strategies. See our blog of October 1, 2021 titled “How Green is Green”, in which we highlight the question of defining “green”.
Now a research group, The Transition Pathway Initiative (TPI), backed by some of the world’s biggest investment firms, plans to help investors make sense of businesses’ climate-change plans.
There is a broad range of ways companies set net-zero targets and commitments, both hard to assess in a consistent way. TPI expects to develop criteria that can be used in comparing diverse strategies, and would allow their assessments to be freely available. It is hoped that making the data public will build momentum among investors and help companies understand how they are being perceived.
This could be quite helpful to investors attempting to evaluate a prospective investment’s commitment to ESG concepts.
All comments and suggestions are welcome. Walter J. Kirchberger, CFA