In our view, climate change and the energy transition are some of the most important long-term structural trends to understand both from a single stock and portfolio construction perspective. On the company level the focus on carbon footprints and pressure on companies to improve energy efficiency are issues that are important and have implications across all industries and companies. Regardless if it is the energy use of the big technology companies' data centres or the packaged foods companies facing operational challenges or higher cost from potential water scarcity.
It is also worth highlighting that while ESG issues including climate change to many companies are a potential risk that needs be mitigated it also offers significant long-term opportunities to other companies providing solutions addressing the problem.
We have actively been engaging with the energy companies in our portfolios, discussing the strategic implications of the energy transition and how the companies’ position themselves. In addition, addressing several other issues including climate engagement, increased disclosure and transparency on emissions, as well as initiatives to offset emissions such as investments in carbon capture and storage technology.