Insights

Climate Metrics – A Primer for Investors

With the rise of climate investing, the increasing recognition of environmental risks and investors across the world beginning their journey to Net Zero, climate metrics are becoming a vital component of successful investment decisions.

February 22, 2022

Carlo Maximilian Funk

EMEA Head of ESG Investment Strategy

Kushal Shah

EMEA ESG Investment Strategy

Yet, the metrics can sometimes appear confusing. Risks can largely be divided into physical risks and transition risks from climate change. These two risks frequently interact, and companies can often be affected by either to varying degrees, depending on their business models, geographic locations, pricing power, etc. To inform our analysis of environmental risks in portfolios, we employ a number of datasets from data vendors. Here, we provide an overview of the data that underlies today’s climate-related investing landscape, and how it is currently being used at State Street Global Advisors, along with plans for future use.

More On : Index Investing, ESG

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