Tackling climate change

Jason Josefs, head of research; Morley Sustainable and Responsible Investments (SRI), comments:

• Climate change is significantly affecting our physical, social and economic environment. The growth and influence of renewable energy sources is needed to drive emissions lower.
• Growing industry and legislative changes in tackling climate change will have a material impact on a number of sectors and directly influence corporate profitability.
• Solutions to climate change represent attractive long-term themes for investors - there will be clear winners and losers.

"Climate change represents one of the most important and challenging environmental issues facing the world today. The main human influence on the global climate is emissions of greenhouse gases, in particular CO2. The effects are being felt globally through changing weather patterns, rising sea levels and increased frequency of extreme weather events.

"Governments, businesses and individuals are increasing their efforts to address the challenge of climate change and opportunities exist for investors wanting to be part of uncovering these solutions.

"The simplest and lowest-cost option for decreasing greenhouse gases is to reduce those activities that require the burning of fossil fuels for energy. However, without the development and investment in alternative energy sources, this solution would significantly reduce current standards of living in the developed world and limit economic growth in developing countries. Global economic expansion still relies heavily on the growth of power generation.

"In order to curb greenhouse emissions, governments are making investment decisions and passing regulations and legislation aimed at supporting greater use of renewable energy sources. Consumers too are increasingly expressing a preference for ‘greener' products and services. At Morley our SRI team believes these trends are likely to have significant effects on the profitability of companies. By analysing management strategy, environmental targets, current exposure to greenhouse gas emissions and expected cash flows it is possible to identify companies more likely to benefit over the long term.

"Examples of this approach include the Renewable Energy Corporation, a Norwegian manufacturer of polysilicon, the raw material needed to make the photovoltaic (PV) cells in solar panels. Within the wind power area, Hansen Transmissions, a Belgian company that produces gearboxes for wind turbines, is also well positioned to benefit from growth in renewable energy sources.

"Besides companies directly involved in renewable energy industries, companies across a range of other sectors are likely to be indirectly affected by the actions of governments and individuals in efforts to curb greenhouse emissions. Some of the primary industries of the global economy including transport, construction, waste and agriculture are all likely to be impacted to some degree by these changing trends.

"Climate change is of such significance that this theme is behind 20-30% of the investment ideas currently held across many of Morley's SRI products.

"In our experience it has been a rich source of investment returns over the years and we believe it will continue to be so well into the future. By providing capital to companies which in turn are developing products and practises which help reduce emissions; and through engaging directly with companies and senior management to drive through emission reductions, investors in the climate change themes are themselves benefiting from being part of the solution."

-ends-

For more information contact:
Jane Reynolds
Corporate Communications
+44 (0)20 7809 8313

Notes to editors:

Unless stated otherwise any opinions expressed are those of Morley Fund Management Limited (Morley). They should not be viewed as indicating any guarantee of return from an investment managed by Morley nor as advice of any nature.

Morley
Morley is the UK-based asset management business of Aviva plc. Firms within the Morley group of companies manage £151bn (€192bn) from offices around the world as at 30 June 2008. 

Morley manages both institutional and retail funds. It also acts as investment manager for a range of retail investment funds, marketed in the UK under the Norwich Union brand and in Europe under the Morley name. The property team manages in excess of £28bn (€35bn) of UK and European property assets.

Aviva Investors
On 28 February 2008, Aviva plc announced it was combining its asset management businesses to create a single, globally integrated asset manager to be known as Aviva Investors - to be launched formally in September 2008.

Aviva Investors will be the global asset management business of Aviva plc, the world's fifth-largest insurance group. Firms that will become Aviva Investors have £316 billion ($623 billion) of assets under management as at 28 February 2008 and significant growth potential.

Operating under a single brand with more than 1,300 employees in 15 countries across the UK, Europe, North America and Asia, and subject to regulatory approval, Aviva Investors will combine businesses in the UK (Morley Fund Management), North America (Aviva Capital Management, MFM International, Aviva Investment Canada), France (Aviva Gestion d'Actifs), Australia (Portfolio Partners), Poland (CUIM Polska), Ireland (Hibernian Investment Managers), Spain (Aviva Gestion SGIIC (Gestora)) and Romania (CertInvest) and work in partnership with Delta Lloyd Asset Management in the Netherlands.

Recent Morley awards

• Property Manager of the Year, European Pensions Awards 2008
• The G7 Fixed Income Fund (EUR) managed by Morley - winner of the Best Fixed Income Hedge Fund on a Risk Adjusted Basis at the Hedge Funds Review Eighth European Performance Awards 2008
• The Norwich Union Life and Pension fund managed by Morley - winner of the category 'Insurance Company Life Funds (£150m to £1.5bn, Dec 07)' at the IPD and Estates Gazette awards 2008
• The Holloways Properties Ltd fund managed by Morley - winner of the category 'Balanced Pooled Funds & Traditional Institutions (above £150m and below £500m, Dec 07)' at the IPD and Estates Gazette awards 2008
• Morley - Money Market Fund category winner at Pension and Investment Provider awards 2008
• Property Manager of the Year, UK Pensions Awards 2007 and 2008
• Morley's G7 Fund awarded Fixed Income Hedge Fund of the Year, Eurohedge Awards 2006 and  2007
• Best Property Manager - Financial News Excellence in Institutional Management Awards, Europe 2007
• Morley ranks no.1 fund manager in the Thomson Extel SRI Survey, 2007
• Equity End User of the Year - Derivatives Week DEAL Awards 2006
• Property Fund Manager of the Year, Pensions Management Awards 2006
• Best Commitment to Raising Standards of Trustee Education, Engaged Investor Awards 2006
• Property Fund Manager of the Year, Property Week Awards 2006
• SRI Provider of the Year, Global Pensions 2006

Aviva plc
Aviva is the leading provider of life and pension products in Europe with substantial positions in other markets around the world, making it the world's fifth largest insurance group based on gross worldwide premiums at 31 December 2006. 

Aviva's principal business activities are long-term savings, fund management and general insurance, with worldwide total sales of £49.2 billion at 31 December 2007 and funds under management of £359 billion at 30 June 2008. 

The Aviva media centre at www.aviva.com/media includes images, company and product information and a news release archive.

For broadcast-standard video, please visit www.thenewsmarket.com/aviva.