ESG Insights: Trends, Analysis & Our Featured Chart #6

Photograph of wind farm at sunrise
For financial professionals only

In this week’s insights we cover nature-related risks to the UK, increased emissions from shipping and the demise of the Net Zero Insurance Alliance. But we’ve also seen a big boost to sustainable investment fund inflows in Q1.

Here’s the key takeaways:

  • Sustainable funds return to positive inflows - funds attracted a net $900m (£718.6m) globally in the first three months of 2024, following re-stated net outflows of $88m in the last quarter of 2023, according to Morningstar's Global Sustainable Fund Flows report.

  • Red Sea trade disruptions cause higher shipping emissions - attacks by Houthi rebels forced cargo ships to take diversions, leading to longer routes, higher speeds and using extra fuel.

  • UK economy faces large nature-related risks - new research from the Green Finance Institute shows the UK economy could suffer a 12% hit to GDP owing to nature loss - making a bigger impact than Covid or the global financial crisis.

  • Net Zero Alliance replaced - a large number of firms left the group because of antitrust concerns from US Republicans. The Insurance Transition to Net Zero (led by the UN Environment Programme) will replace it, focusing on improving net zero frameworks instead of mandating targets.

  • Enel misses emissions target, forced to raise bond interest rates - blaming the Russian energy crisis, the utilities provider failed to meet its company-wide emissions targets attached to some Sustainability Linked Bonds, forcing a higher interest rate.

Featured chart

Chart showing how wind and gas power usage compare in the UK

Source: National Grid ESO data compiled by Bloomberg.

Our chart of the week shows how much electricity is produced from wind power in the UK, compared to gas. According to National Grid, over the last two quarters wind has produced more electricity than oil, gas and coal plants combined for the first time ever. 

Why’s this worth sharing?

It’s encouraging to see wind’s share of total electricity is rising, making a significant contribution to greening the UK’s power grid as we transition into a low-carbon economy. In another boost for renewable energy producers, demand for wind farm production is set to rise further as the UK aims to triple the size of its offshore-wind capacity by 2030.

This article is for financial professionals only. Any information contained within is of a general nature and should not be construed as a form of personal recommendation or financial advice. Nor is the information to be considered an offer or solicitation to deal in any financial instrument or to engage in any investment service or activity. Parmenion accepts no duty of care or liability for loss arising from any person acting, or refraining from acting, as a result of any information contained within this article. All investment carries risk. The value of investments, and the income from them, can go down as well as up and investors may get back less than they put in. Past performance is not a reliable indicator of future returns.  

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