Agefi Luxembourg - janvier 2025
Janvier 2025 Fonds d’investissement DNCA Finance est une Société en Commandite Simple agréée par l’Autorité des Marchés Financiers (AMF) en tant que société de gestion de portefeuille sous le numéro GP00-030 régie par le Règlement général de l’AMF, sa doctrine et le Code Monétaire et Financier. DNCA Finance est également Conseiller en Investissement non indépendant au sens de la Directive MIFID II. DNCA Finance Luxembourg Branch 1 Place d’Armes - L-1136 Luxembourg. V O T R E É P A R G N E A T R O U V É S A P L A C E dnca-investments.com By Matt CHRISTENSEN, Global Head of Sustainable & Impact Investing, Allianz Global Investors A fter a year dominated by elections, 2025 will be framed by the after- shocks. Tackling climate im- pact, the raft of new regulations, and evolu- tion in defence spen- ding are among the priority topics that will influence sustai- nable investing in the coming year. The year 2024 has been tu- multuous on many fronts. But 2025 could see a much- needed pragmatism by all stakeholders to push for the actions – and finance – to imple- ment the transition towards a more resilient global economy for the 2030s and beyond. We anticipate the following five factors will be re- curring themes for investors in 2025. 1. Climate impact to climate transition Summer 2024 has been confirmed as the hottest on record, with 22 July achieving the highest daily global average temperature. In the au- tumn, Hurricane Milton and Storm Boris broke records for their intensity. These events provide confirmation of our pre- diction last year that in 2024 the global focus would shift from the long-term to the near- term costs of climate impact. Looking ahead, despite ongoing political divisions, we expect 2025 to be the next stage of the journey from cli- mate impact to climate transition. What sounds simple is quite complex – the con- cept requires a coordinated framework to cred- ibly direct and incentivise all stakeholders in the transition towards a decarbonised global economy. Many remain focused on Energy transition, but the opportunity in energy effi- ciency remains the “first fuel” when it comes to climate transition. To achieve a clear and credible transition plan in the coming year, developments are needed in scenario analysis, climate risk frameworks, and finance and regulatory frameworks, in ad- dition to clarity on who ultimately finances an equitable transition, and how. 2. The big moment of truth A wave of enhanced regulatory frameworks, guidance and oversight will hit next year. These will place heavy burdens for companies at a time when the EU is reviewing its compet- itiveness. We see this as a “moment of truth” in terms of whether these enhancements are an extra cost, or will motivate much-needed capital alloca- tion towards the climate transition. In 2025, Eu- ropean companies will face increased disclosure requirements and scrutiny of their value chains. Investors await possible changes to regulations on disclosures and European sustainability reg- ulation. This is likely to coincide with new for- mal categorisation regimes (in Europe and the UK), the uptake of the new Green Bond Stan- dard, possible new transition plan guidance and standards, and the continued impact of legislation to regulate ESG ratings providers. Much of this regulatory development will cen- tre around Europe, but the world is watching. Companies and investors are fatigued by the changing regulatory expectations of recent years, and regulators risk creating confusing market signals instead of promoting sustain- able and transition finance. 3. The sovereignty of climate The role of governments on the issue of climate will shift in focus to their own robust targets – in line with their expectations of corporate ac- tion. Under the Paris Agreement, 196 countries have until February 2025 to update their Na- tionally Determined Contributions (NDCs), which lay out how each nation will contribute to global temperature goals. What influence could a possible second withdrawal from the Paris Agreement by US have on sovereign cli- mate ambition? The 2015 Paris Agreement has yielded re- sults, but sovereign ambition and finance remain insufficient to keep us within the less impactful scenario of 1.5°C. Next year’s second Global Stocktake is likely to suggest we are headed for a 1.9-2.1°C range where the climate risks are significantly more ma- terial than 1.5°C. If sovereigns are aiming for 2°C, what does it say for corporate 1.5°C commit- ments? With an estimated USD 6.2 trillion per year of global in- vestment required to deliver net zero, climate finance rep- resents a significant opportu- nity for capital markets to innovate on structures and stan- dards. Sovereigns have a direct role to play in this financing. 4. The case for defence Opinions divide on defence as a “social neces- sity” versus a “social good.” However, the on- going war in Ukraine and conflict in the Middle East highlight the need for a consensus on how to finance the defence sector which has had a sustained period of underinvestment for sev- eral decades in a number of countries. The risks are particularly acute for Europe and could heighten if the new US administration re- considers its approach and priorities on de- fence. Defence spend will continue to rise and needs to be jointly financed by sovereigns and investors. Specific guidance and alignment on how the sector should be considered in investments is a priority, especially in relation to what is deemed socially harmful. We predict several important developments in 2025: - European Union member states will act on NATO commitments to increase defence spend to 2% of GDP. - Further improvements in EU collaboration on defence investment and projects. - Greater regulatory alignment on how to con- sider the positive or negative contributions of different defence categories in investment port- folios. - Disclosure of defence-related products and services and supply chain will improve. Achieving these will make it easier for sovereigns and investors to align on how and where to finance the defence sector. However, the increasing spend coincides with other bud- getary pressures, which risks the possible di- version of finance flows from sustainable goals or higher budget deficits. 5. Working with the modern workforce A World Economic Forum report has high- lighted how technology-driven transforma- tions in the global labour market are being compounded by economic and geopolitical dis- ruptions and rising environmental and social pressures. The global labour market now faces the diver- gent outcomes of higher unemployment and a widening talent shortage. For example, AI, au- tomation and other technological advance- ments are raising concerns of large-scale redundancies. Meanwhile the global labour market could experience a shortage of more than 85 million people by 2030, according to Korn Ferry. A longer-term more strategic and mindful ap- proach to the modern workforce is required to minimise the impact on productivity of this workforce transformation in order to ensure we maximise the opportunities. In sectors such as aerospace and transport that are undergoing structural change, labour dis- ruptions are proving costly, with industrial ac- tion surging in Europe and the US. Solutions will encompass skills training, inclusion and di- versity, and more localised supply chains. New regulation, like the Corporate Sustainabil- ity Reporting Directive, will require greater dis- closure on social factors. This coupled with the rising cost of labour disruptions, will sharpen the focus on workforces in 2025. Sustainable investing in 2025: five themes to watch
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