investment viewpoints

Transition opposition: 3 ways to challenge sustainability sceptics

Transition opposition: 3 ways to challenge sustainability sceptics
Marek Siwicki - Head of Consultant Relations

Marek Siwicki

Head of Consultant Relations
Sheena Shah - Consultant Relations

Sheena Shah

Consultant Relations

As the financially material risks and opportunities of the climate and nature crises become clearer, many investors seek new analytical approaches to understand which companies are adapting to a more sustainable economic model. But some pensions trustees resist this change.

Need to know:

  • Not all investors share LOIM’s conviction that sustainability will drive returns. We welcome this debate: such challenge provides opportunities to explain our beliefs
  • We share three communication approaches – all grounded in financial materiality – for persuading sustainable-investment sceptics to reconsider their views
  • As professional investors with clients’ long-term returns in focus, we believe it is part of our job to make these conversation happen


Financial materiality

Two of the chief counterarguments are that sustainability risks are financially immaterial or the impacts of climate change and nature’s decline on assets are too difficult to price. This can be frustrating for the investment consultants and asset managers they have appointed who believe there is merit in understanding how efforts to green the economy could influence long-term returns.

What can cut through scepticism about sustainability? At Race to net zero, an event convened by LOIM for UK investment consultants, we discussed three approaches to clarifying the financial materiality of climate and nature risks.



Make it happen

New metrics are being developed to gauge climate risk and the dimensions of natural capital, from deforestation and water intensity to materials extraction. Externalities are being priced. As some companies pursue new growth opportunities, others risk becoming stranded.

Scepticism among trustees could result in schemes being exposed to intensifying risks while forgoing opportunities generated by the sustainability transition. Part of the job for their investment consultants and asset managers is to make the conversation happen.

important information.

For professional investor use only
This document has been issued by Lombard Odier Funds (Europe) S.A. a Luxembourg based public limited company (SA), having its registered office at 291, route d’Arlon, 1150 Luxembourg, authorised and regulated by the CSSF as a Management Company within the meaning of EU Directive 2009/65/EC, as amended; and within the meaning of the EU Directive 2011/61/EU on Alternative Investment Fund Managers (AIFMD). The purpose of the Management Company is the creation, promotion, administration, management and the marketing of Luxembourg and foreign UCITS, alternative investment funds ("AIFs") and other regulated funds, collective investment vehicles or other investment vehicles, as well as the offering of portfolio management and investment advisory services.
Lombard Odier Investment Managers (“LOIM”) is a trade name.
This document is provided for information purposes only and does not constitute an offer or a recommendation to purchase or sell any security or service. It is not intended for distribution, publication, or use in any jurisdiction where such distribution, publication, or use would be unlawful. This material does not contain personalized recommendations or advice and is not intended to substitute any professional advice on investment in financial products. Before entering into any transaction, an investor should consider carefully the suitability of a transaction to his/her particular circumstances and, where necessary, obtain independent professional advice in respect of risks, as well as any legal, regulatory, credit, tax, and accounting consequences. This document is the property of LOIM and is addressed to its recipient exclusively for their personal use. It may not be reproduced (in whole or in part), transmitted, modified, or used for any other purpose without the prior written permission of LOIM. This material contains the opinions of LOIM, as at the date of issue.
Neither this document  nor any copy thereof may be sent, taken into, or distributed in the United States of America, any of its territories or possessions or areas subject to its jurisdiction, or to or for the benefit of a United States Person. For this purpose, the term "United States Person" shall mean any citizen, national or resident of the United States of America, partnership organized or existing in any state, territory or possession of the United States of America, a corporation organized under the laws of the United States or of any state, territory or possession thereof, or any estate or trust that is subject to United States Federal income tax regardless of the source of its income.
Source of the figures: Unless otherwise stated, figures are prepared by LOIM.
Although certain information has been obtained from public sources believed to be reliable, without independent verification, we cannot guarantee its accuracy or the completeness of all information available from public sources.
Views and opinions expressed are for informational purposes only and do not constitute a recommendation by LOIM to buy, sell or hold any security. Views and opinions are current as of the date of this presentation and may be subject to change. They should not be construed as investment advice.
No part of this material may be (i) copied, photocopied or duplicated in any form, by any means, or (ii) distributed to any person that is not an employee, officer, director, or authorised agent of the recipient, without Lombard Odier Funds (Europe) S.A prior consent. In Luxembourg, this material is a marketing material and has been approved by Lombard Odier Funds (Europe) S.A. which is authorized and regulated by the CSSF.
©2022 Lombard Odier IM. All rights reserved.