Asset managers and eco-anxiety

Eco-anxiety, a term coined by psychologists and environmentalists, is a form of chronic fear of environmental doom. It’s a fear borne out of the very real and rapidly increasing threat of global warming and environmental degradation. As global temperatures rise, and evidence of climate change is irrefutable, growing numbers of people are experiencing feelings of helplessness, anxiety, and despair about the future of our planet. BACP’s (British Association for Counselling and Psychotherapy) Public Perceptions Survey this year found that 60% of people in the UK say that climate change has had a negative impact on their mental health and well-being.

As ESG and sustainability become a central focus of the day job, asset managers are not exempt from the psychological toll of dealing with these issues. Eco-anxiety tends to be more prevalent among people who are more aware of the necessity to protect the environment. Therefore, you must look after your mental health and well-being while considering and tackling such existential issues.

Rising temperatures, rising concerns

How can we truly enjoy a sunny day knowing the climate is in crisis? As daily temperatures reach new highs and environmental disasters make headlines more frequently, it’s no surprise that eco-anxiety is on the rise. Even for asset managers, worrying data and predictive models aren’t just figures on a report—they’re manifestations of a real-world crisis that can induce significant stress and anxiety.

Evidenced consideration of sustainability and net-zero strategies are no longer options but expectations. Growing interest and awareness of environmental issues have resulted in additional pressures, including the need to consider more legislation, provide more evidence on impact, and continuously monitor portfolio sustainability status. The urgency and workload associated with these tasks may exacerbate feelings of eco-anxiety. 

Moreover, asset managers bear the burden of knowing that their decisions have far-reaching implications not only for their clients’ portfolios but also for the global environment. It’s a tough balance.

Managing eco-anxiety

Recognising and mitigating eco-anxiety requires a comprehensive, empathetic, and action-oriented approach. Below are further strategies that asset managers and their employers can utilise:

  1. Work-life balance: It’s essential to maintain a healthy work-life balance. Allow time to pursue activities that give you a sense of purpose and joy, separate from your professional responsibilities. This personal time can serve as a powerful counterbalance to work-related stress and anxiety.
  2. Connect with nature: Immersing yourself in nature can offer therapeutic benefits, reminding you of what we’re striving to protect and offering a sense of tranquillity. Regular nature walks, gardening, or even spending a few quiet moments in a park can help reduce stress levels and provide a fresh perspective.
  3. Celebrate milestones: Big or small, celebrating milestones can foster a sense of achievement and forward momentum. Recognising progress can ease feelings of despair and helplessness, promoting a more positive outlook.
  4. Focus on legislative progress: While there’s certainly more work to be done, concentrating on the positive direction of the legislative agenda can provide hope. Increased regulatory attention towards climate change and sustainability is a step in the right direction, indicating that the urgency of these issues is being recognised and addressed at the highest levels. The recent passing of the Nature Restoration Law is a great case in point.
  5. Promote active engagement: As asset managers, your role isn’t just about managing portfolios; it’s about steering investee companies to become better environmental custodians. More and more asset managers and owners are focusing on this aspect, using their influence to drive sustainable practices within their investee companies. Celebrating these engagements and their positive outcomes may contribute to easing eco-anxiety.

Eco-Anxiety and ESG: The social factor

Back in work mode: from an ESG standpoint, recognising and addressing eco-anxiety is paramount. The ‘Social’ pillar requires organisations to prioritise their employees’ mental health and well-being, weaving it through day-to-day operations. Financial institutions included. Proactive support and resources should be offered to anyone struggling with eco-anxiety; ignoring it can lead to burnout, decreased productivity, and a downturn in overall employee health and well-being.

Eco-anxiety is a burgeoning issue, reflecting collective concern for the planet. For asset managers, navigating this has become an integral part of the job. By fostering an environment of understanding, providing tools to manage stress, and promoting positive action, we can ensure not only the sustainability of our planet but also the mental health of those working towards this goal.

 

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