Our Global Equity Beta Solutions team outlines options for institutional investors to integrate climate change into their portfolios and discusses the characteristics of various climate strategies.
Climate change is here and we will experience the impact of changing weather patterns, rising sea levels and deteriorating ecosystems on the real economy for decades to come. Globally, governments are showing greater commitment to address climate change, while the spirit of European regulatory initiatives to decarbonise looks likely to spread to the US and beyond. Therefore, the question is no longer whether asset owners should act to address climate risks in their portfolios. It is how best to preserve and grow long-term returns in an environment where climate risks will only heighten and regulations will only become more onerous. This article outlines the options available for asset owners.