Why you can’t ignore climate change with your portfolio

International action to tackle climate change is going to change the investing landscape. Piper Terrett tips one fund to benefit.

Regardless of whether you like the idea of investing in green technologies, it's increasingly clear that you can't ignore the impact of climate change on your investments. Earlier this month, the Group of Seven industrial nations signed a deal aimed at eliminating fossil fuel emissions by the end of this century, after years of failed talks. And while many environmentalists say this deadline is far too far in the future, the consequences for sectors such as oil and coal are likely to be evident much sooner.

Tellingly, the $900bn Norwegian sovereign wealth fund which has been funded entirely out of Norway's oil wealth is already taking action.The fund recently sold more than £5bn of coal investments in 122 companies, including a $956m holding in UK utility SSE and a $49m stake in power station Drax. It joins a growing number of institutions that are divesting stakes in companies seen as contributors to climate change, or those that are likely to be affected by tough rules.

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Piper Terrett is a financial journalist and author. Piper graduated from Newnham College, Cambridge, in 1997 and worked for Germaine Greer and for Adam Faith’s Money Channel before embarking on a career in business journalism. 

She has worked for most top financial titles, including Investors Chronicle, Shares magazine, Yahoo! Finance and MSN Money. She lectures part-time at London Metropolitan University and is the author of four books.