Finance Monthly - January 2022

50 Finance Monthly. Inve s tmen t among investors, with just 19% considering ESG investment to be a savvy investment strategy at present. So, what exactly is driving this mindset, andwhat should investors be watching as we transition to a zero-carbon economy? ‘Too much hype around ESG? One potential answer to this question could be that concerns surrounding ‘greenwashing’ are deterring traders and investors from upping their investment in ESG assets. According to that same HYCM survey*, more than a third (38%) said that there is “too much hype” surrounding ESG investing at present. The question, then, is whether these trepidations are substantiated. The answer is yes and no; while investors are quite right to be sceptical of companies hopping on the green bandwagon with re-branding and lofty environmental claims, they should make themselves aware of genuinely green initiatives. In the months and years to come, there will be many opportunities for traders and investors in the race to net zero across many areas. From a growth perspective, in the capital goods area, there is a huge amount of potential in the supply chain for climate solutions. Likewise, the technology field will be a crucial enabler for climate solutions in the long term, so investors should monitor these opportunities closely. At the moment, just one third (33%) of the investors surveyed* by HYCM plan to invest (or increase their investment) in green energy such as wind power, water stocks and solar energy in the next 12 months. That said, we can expect these figures to grow in line with changing environmental policy, such as a global carbon tax which would shock the stock market in the future. Green metals, such as copper, aluminium, nickel and lithium could also see gains over the medium term as their demand is expected to increase. Likewise, it is also important to note the fact that alternatives to traditional energy, such as oil, are already proving popular with traders and investors – right now, oil is one of the top traded commodities at HYCM. Young investors will lead the charge Another trend to be aware of is the fact that younger investors appear to be at the forefront of the shift towards net-zero. Compared with the smaller number (45%) of “The path to a greener future is paved with investment opportunities, but this has not necessarily translate immediately to the stock market.” of the investors surveyed * by HYCM plan to invest (or increase their investment) in green energy such as wind power, water stocks and solar energy in the next 12 months.” “