Retail Investors Look for more Carbon Friendly Investment Funds – Research Reveals
One in four investors place a greater focus on the carbon footprint of a fund than its charges.
Some two thirds (65%) of UK retail investors say they would be more likely to invest in funds that provided greater information on their carbon footprint and are transparent on what they are doing to reduce it. This is according to new research from Kana Earth Ltd, which has recently launched a unique UK nature carbon directory listing over 1,700 nature carbon offsetting projects.
Currently, 34% of UK retail investors say they consider the carbon footprint of stock market related investments before investing in them. Furthermore, one in four (26%) say that when considering whether or not to invest in a fund, they place more focus on its carbon footprint than its charges.
Between now and 2027, 46% of UK retail investors believe they will increase their allocation to investment funds with a strong focus on reducing their carbon emissions. Some 15% expect to dramatically increase their exposure to these funds.
Andy Creak, CEO, and co-founder, Kana Earth Ltd said: “Investors are increasingly shining a spotlight on the carbon footprint of investment funds before deciding whether or not to invest in them. We see this trend gathering substantial pace over the next few years, and a fund manager’s ability to show transparency here and a proactive programme for reducing a fund’s impact on the environment will be seen as equally important as its charges and performance.”
Kana Earth will soon launch an open ledger and investment platform for the UK’s carbon offsetting market, which addresses many of the major obstacles holding the sector back.
It will enable UK developers and landowners with carbon offsetting projects to list, manage and promote these on the platform, providing unprecedented levels of transparency in terms of overall goals and carbon reduction targets for the schemes, and how these will be achieved.
This will make it easier for fund managers, pension funds, other institutional investors, wealth managers, and all other organisations looking to reduce their carbon footprint or generate ethical returns through buying and investing in transparent UK offset projects.
The UK nature carbon offsetting challenge
Carbon offsetting is critical in meeting the UK’s target to reduce carbon emissions targets by 78% by 2035 from 1990 levels, and to be carbon neutral by 2050, but the domestic market is disjointed and underdeveloped.
Between now and 2035, the country will emit a sizeable 3,340m tonnes of CO2 but the UK’s Nature based Carbon projects to date will absorb only 18m tonnes CO2.
The UK carbon offsetting market’s complexity and lack of scale means it is missing out to massive carbon growth in other countries.
The Kana solution in practice
The Kana Ledger introduces an open, auditable, and scalable foundation for UK carbon offset where schemes can be created, managed, and traded in a liquid marketplace.
Professional investors, businesses, and organisations in general will be able to search a single directory of carbon offset projects that operate under a Standard Legal Framework.
The Kana Marketplace provides distribution and scale to the carbon projects and provides a straightforward process for professional investors and UK corporates to buy carbon units across multiple projects, project types and time periods, including the ability to evidence their purchases on their own website.
The Kana Investment Platform brings in private money which allows developers to scale carbon offsetting projects. The platform will be critical in supporting asset managers’ new ‘Green’ thematic funds’ investment in future carbon units and provide avenues for insurers and other institutional investors to channel money to carbon offsetting projects.
