Green Investors Say Transportation Pledges Depend on Advances in Technology, Auto News, ET Auto
By Ross Kerber
Environmentally conscious investors hailed carbon-reduction pledges from major transport companies and governments announced at the United Nations climate summit on Wednesday, but said the goals could be pipe dreams without big breakthroughs in technologies such as vehicle batteries and aviation fuel.
“It’s a big commitment, but it needs to be matched with a commitment of resources to fund the transition and create products,” said Anthony Sassine, senior investment strategist for KraneShares. Its funds include the Electric Vehicles & Future Mobility ETF focused on electric vehicles.
For example, Sassine noted that major U.S. automakers Ford and General Motors did not yet have electric versions of their best-selling pickup trucks on the market.
Yet the two companies were among those who signed a series of pledges at the summit in Glasgow, Scotland, to reduce greenhouse gas emissions from global transport.
The companies agreed to strive to make all new cars and vans zero-emission by 2035 or earlier in major markets, and to promote the development and use of sustainable aviation fuels, among others.
Marcela Pinilla, director of sustainable investing for Zevin Asset Management, said both areas will require further development.
For example, Zevin owns shares in shipper United Parcel Service, whose planes would need increased access to sustainable fuel that is currently in limited supply. Rivals like Fedex Corp face similar restrictions, she said, as do airlines.
“Consolidated transport companies face the same sustainability problem as passenger airlines,” she said.
Lauren Compere, chief executive of Boston Common Asset Management, welcomed pledges but will watch how companies support them in areas such as research and development spending.
“Businesses will have a hard time meeting these commitments” unless they collaborate on technology and receive government assistance with regulations and infrastructure spending, she said.
The promises are only part of the broad agenda facing the United Nations conference, amid criticism that governments are not moving fast enough.
Driving, flying and shipping contribute nearly a quarter of global carbon emissions from fuel consumption, according to the International Energy Agency, the watchdog. Barriers to reducing emissions include growing demand for same-day deliveries and consumer preferences for heavier vehicles, the agency said.
Tony Tursich and Jim Madden, who co-lead the sustainable equities team at Calamos Investments, said companies that have not signed on to the pledge should not necessarily be sidelined, as Volkswagen AG, for its part, still spends a lot on electric vehicles. Key to the automakers’ efforts will be further investments in things like public charging stations, they said via email.
“Without these investments, municipal and corporate commitments … cannot be met,” they said.
Sudhir Roc-Sennett, ESG manager of Vontobel Quality Growth, said on Wednesday that many of the engagements came from consumer brands like ridesharing company Uber Technologies Inc and housewares maker Unilelver PLC seeking to show their support for the fight against climate change, a popular cause.
“The public is very aware of climate change and they are afraid of it. So it makes sense that Uber and others would want to offer electric vehicles,” and similar products, Roc-Sennett said.