Green investors say transportation pledges hinge on tech advances
Nov 11 (Reuters) - Environmentally minded investors praised carbon-cutting pledges by major transportation companies and governments announced at the U.N. climate summit on Wednesday but said the goals could be pipe dreams without big advances in technologies like vehicle batteries and aviation fuel.
"It is an important commitment but it has to be accompanied by the commitment of resources to fund the transition and create products," said Anthony Sassine, senior investment strategist for KraneShares. Its funds include the Electric Vehicles & Future Mobility ETF (KARS.P) focused on electric vehicles.
For instance, Sassine noted major U.S. carmakers Ford (F.N) and General Motors (GM.N) do not yet have electric versions of their best-selling pickup trucks on the market.
Still, both companies were among those signing on to a raft of pledges at summit in Glasgow, Scotland to slash greenhouse gas emissions from global transportation. read more
Companies agreed to work toward making all new cars and vans zero-emission by 2035 or sooner in leading markets, and to promote the development and use of sustainable aviation fuels, among other things.
Marcela Pinilla, director of sustainable investing for Zevin Asset Management, said both areas will require more development.
For instance Zevin owns shares of shipper United Parcel Service, whose aircraft would need more access to sustainable fuel currently in limited supply. Rivals like Fedex Corp (FDX.N) face similar restrictions, she said, as do airlines.
"Packaged transit companies are in the same sustainability conundrum that passenger airlines are in," she said.
Lauren Compere, managing director at Boston Common Asset Management, praised the pledges but will watch how companies back them in areas like research & development spending.
"Companies will struggle to achieve these commitments" unless they collaborate on technology and receive government help on regulations and infrastructure spending, she said.
The pledges mark just part of the broad agenda of tasks facing the U.N. conference, amid criticism governments aren't moving quickly enough. read more
Driving, flying and shipping contribute nearly a quarter of the world’s carbon emissions from fuel consumption, according to watchdog International Energy Agency. Obstacles to cutting emissions include growing demand for same-day deliveries and consumer preferences for heavier vehicles, the agency said.
Tony Tursich and Jim Madden, who co-head the Calamos Investments Sustainable Equity Team, said companies that did not sign the pledge should not necessarily be discounted, since Volkswagen AG (VOWG_p.DE), for one, still spends heavily on electric vehicles. Key to the automaker efforts will be other investments in things like public charging stations, they said via e-mail.
"Without these investments, the municipal and corporate commitments...cannot be met," they said.
Sudhir Roc-Sennett, Head of ESG for Vontobel Quality Growth, said many of the pledges on Wednesday came from consumer-facing brands like rideshare company Uber Technologies Inc (UBER.N) and homegoods maker Unilelver PLC (ULVR.L) looking to show support for addressing climate change, a popular cause.
"The public has a great awareness of climate change and they're frightened of it. So it makes sense that Uber and others would want to offer electric vehicle" and similar products, Roc-Sennett said.
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