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DWS: For a European transformation, sustainable investing must become easier
European companies have yet to recognize and start addressing the structural challenges which lie ahead, made worse by a stagflationary rising interest rate environment. Investors have a role to play in addressing these multiple challenges, particularly as most investors claim to pursue a long-term investment horizon. European financial regulations are also key stakeholders driven by the recognition that capital has detrimental impacts on the environment and society, wrote Francesco Curto, global head of Research, DWS.
However, in publicly listed markets, incentives tend to be geared towards short-term, relative financial performance. Europe’s vast pools of savings are also not finding their way into productive, sustainable and transformational activities and are also earning below-inflation returns.
In addition, an investor who wants their capital to have a sustainable, transformative role in society is discriminated against, facing higher costs compared to traditio