Like most big problems, climate change will require big solutions. Governments and business will have to make massive investment in clean energy–$45 trillion between now and 2025, says the International Energy Agency. This could make some people very rich. Wall Street, are you listening?
Deutsche Bank is. No financial institution has done more to promote investment in climate change solutions than Deutsche Bank. In 2007, it started a unit called DB Climate Change Advisors that has produced path-breaking research and developed products for institutional investors. The bank has also said—loudly and often—that climate change is a crisis that needs to be addressed. That huge digital billboard (left) by Madison Square Garden in midtown Manhattan proclaims that “Climate Change Affects Everyone” and keeps a running tally of the greenhouse gases in the atmosphere.
This week, I met with Kevin Parker, the global head of asset management for Deutsche Bank and the driver of the bank’s climate change commitment. Parker was a managing director at Morgan Stanley before joining DB in 1997, where he now oversees a group that has about $727 billion under management. Of that,about $7 billion, or 1%, is invested in products with a climate-change focus. That number, he says, really should be much higher.
“Climate change is not merely an investment sector that may hold future promise,” he wrote recently, in the introduction to a detailed report called Investing in Climate Change 2010. [PDF, download here.] “It is a sector that has already delivered and is continuing to deliver.”
More about that claim in a moment, but first a word or two about Kevin. For him, it turns out, the climate change issue is both personal and business. Parker, who is 50, told me that [click to continue…]