Trium, which oversees a total of $700 million from its base in London, has singled out a number of transition stocks that Pepper says are actually cheaper now than they were going into the pandemic.
“They’re doing very strong things environmentally,” said Pepper. “These are companies in so-called dirty sectors. One’s a miner, one’s a utility, we’ve got a steel manufacturer. They do have a carbon footprint but it’s been substantially reduced.”
Pepper says finding cheap transition stocks is “a relatively lower-risk way” to “take your money and do something good for the environment,” instead of “going into these more high-risk, very expensive stocks where you could have some big fluctuations in valuation, and potentially on the downside.”
Tech stocks were mixed on Monday morning, with Meta trading about 2% lower while Amazon was up about 3% following strong results on Friday. The Nasdaq gained about 0.7%.
At the same time, a research note by Bank of America analysts including Savita Subramanian titled “ESG vs. Inflation” questioned the assumption that tech stocks are a safe climate bet.
“ESG holdings indicate funds are ably managing direct -- Scope 1 -- emissions risk, but fail to manage indirect/supply chain emissions risks,” the analysts wrote in a note to clients published on Friday. “Some of the biggest overweights in ESG funds have the largest reported indirect emissions -- data-center heavy tech, Internet retail, electric vehicles, new media.”
This article was provided by Bloomberg News.