The investing theme of environmental, social, and governance (ESG) caught on in Europe prior to the United States, and it maintains its popularity as most Europeans value things such as climate change as long as they don’t have to sacrifice one thing: a change in their lifestyle.
This notion was substantiated by a YouGov survey, according to an article in The Guardian. While ESG investing has grown exponentially in Europe, it has lagged in the U.S. Based on the survey results, anything that warrants a change in lifestyle would make them think twice.
“Many Europeans are alarmed by the climate crisis and would willingly take personal steps and back government policies to help combat it, a survey suggests – but the more a measure would change their lifestyle, the less they support it,” the article said, noting he survey included “state-level climate action, such as banning single-use plastics and scrapping fossil-fuel cars, and individual initiatives including buying only secondhand clothes and giving up meat and dairy products.”
When it came to lifestyle changes, the results showed that anything fuel-related got the most opposition. It also varied by country, meaning some nations opposed certain changes affecting cars, while others were more accepting.
“An obligatory increase in fuel duty, however, and government legislation banning the production and sale of petrol and diesel cars outright, were not popular,” the article said. Those opposed to paying more fuel tax outnumbered those in favour in all countries.”
“And asked what they thought of a ban on fossil fuel cars, only in Spain and Italy were more people happy with the idea than opposed to it – with the level of opposition in countries such as France and Germany, at more than 60%, almost double the support,” the article added.
Leverage European Support for Climate Change
Needless to say, ESG still remains a popular investment theme, which should offer investors growth opportunities. One area is the carbon credit market, which allows for businesses to continue operations by purchasing carbon credits.
This opens an opportunity for exchange traded funds (ETFs) like the KraneShares European Carbon Allowance ETF (KEUA). The fund offers exposure to the IHS Markit Carbon EUA Index. This benchmark tracks the most-traded EUA futures contracts, the oldest, most liquid carbon allowances market.
“The program targets reducing emissions by at least 55% of 1990 levels by 2030 and climate neutrality by 2050,” the fund’s product website noted.
For more news, information, and analysis, visit the Climate Insights Channel.