The Price of Climate Change for Investors
BlackRock Investment Institute, the world’s largest asset manager, issued an in-depth study on how climate change is impacting the investment world on November 4, 2015 concluding that climate change risk is a significant investment challenge.
The report, The Price of Climate Change: Global Warmings’ Impact on Portfolios (October 2015), finds that the regulatory, economy, and technological factors surrounding climate change will have “profound impacts on asset prices in all areas for a long time to come,” according to Ewen Cameron, BlackRock’s chief investment strategist.
The report’s Summary tells those who disbelieve that climate change is real or dismiss the science behind it to set aside their denial and focus on the real risk that climate change poses to those who care about investment returns.
BlackRock covers the potential for serious financial risk from “stranded” assets—those that will be written down before their expected investment span, as well as divesting from “climate-unfriendly” businesses; how global insurers are changing practices in light of major weather events; how emissions trading and green bonds are changing securities markets; and how asset owners can promote sustainability and include a focus on environmental, social, and governance excellence as a mark of operational and management quality.
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To read the full report, download it here.