Deutsche Bank steps up climate change effort

London, 18 October: Climate change is a ‘mega’ economic trend that will create significant opportunities for investors, for at least the next decade, according to Deutsche Bank’s asset management division.

Launching a white paper on climate change investment – and creating a new role of “climate change strategist” – the bank said it had already raised €6 billion ($8.6 billion) into investment products related to the issue.

Kevin Parker, global head of Deutsche Asset Management (DeAM), said the firm wanted to strengthen its position in this market sector. “We believe the shift away from a carbon-based economy is a mega trend that will shape the asset management industry for many years. We expect return opportunities in sectors like renewable energy, water and agribusiness will justify dedicated strategies and we believe climate change will be an important consideration for investment decisions,” he said.

The white paper notes it “could take a number of years” before climate risk is systematically integrated into stock analysis. But, for at least the next decade, climate change will be a “complex and enduring economic force” that is likely to create significant returns for good stock pickers.

Mark Fulton, New York-based global head of strategic planning for DeAM, will take on an additional role as the firm’s climate change strategist. He will develop a plan to address investment opportunities and products, and head a climate change investment committee.

The firm has identified four drivers for its climate change investment analysis:

• Due to scientific analysis, governments are regulating, creating economic and business opportunities;
• Carbon prices are emerging and are central to the whole process;
• Some corporates will take action on competitive and reputational grounds; and,
• New technologies will play a central role in mitigating the problem.