As climate change climbs up the political agenda, investors will need to pay it due attention, according to experts speaking at a Barclays investment event held recently in Guernsey and Jersey.
Damian Payiatakis, Head of Impact Investing, Private Bank, Barclays, was in the island to meet clients and he explained the implications of climate change to their investments. “Climate change cannot be ignored,” he said.
“Beyond the tangible impact on people and the planet, no investor’s portfolio is immune from its effects. It presents risks across industries and companies, while offering tremendous opportunities for new investment. For those who haven’t adapted their portfolios yet, this should be the year to start.”
Guest speaker Pierre Abadie, Investment Executive Director at Tikehau Capital, echoed Mr Payiatakis’s sentiments and encouraged investors to look at the world pragmatically and research how different companies operate before making an investment decision: do they use extensive resources which counteract their final outcomes, are they at risk of employing slave labour in their supply chain or do they act ethically and responsibly in ensuring their business is sustainable?
The attendees at the investment roadshow also heard about the latest developments in investment strategy from Julien Lafargue, Head of Equity Strategy Advisory, and Michel Vernier, Head of Fixed Income Specialist at Barclays Private Bank.
Attendees heard that with Brexit unfinished and a US presidential election in November, 2020 is set to see further geopolitical uncertainty. The end result of these two events will likely affect financial markets for the foreseeable future.
However, the expert view was that while volatility would not likely result in a recession, global growth remains fragile.
Michel Vernier said: “We believe that uncertainty will remain in 2020 driven by a moderation in global growth and a political challenging environment.
“At the same time we expect that attractive returns can be achieved using the right strategies: Diversifying portfolio with private assets, market neutral strategies but also using stock selection and active management for example will help to achieve attractive returns in 2020 in our view.”
Simon Smith, Head of Barclays Offshore Investments in the Crown Dependencies concluded: “We see several factors which potentially could trigger temporary volatility spikes in the near future: a constructive outcome from the US-China trade war negotiations, a positive Brexit outcome and positive economic or inflation surprise.
“Active management will be key to navigating this challenging environment and we are sticking to our investment philosophy that favours quality over any other style.
“We expect more fiscal spending to be aimed at tackling climate change. In a year, when other uncertainty should reach new highs, climate change is a certainty that deserves all our attention.”
