Climate Scenario Analysis: A Rigorous Framework for Managing Climate Financial Risks and Opportunities

Climate change is one of the defining issues of our age. Its physical manifestations are negatively affecting ecosystems, human health, and economic infrastructure. And even if the world is able to keep global temperature increases to 1.5° above pre-industrial levels, much more disruptive outcomes are coming.

Meanwhile, energy systems and patterns of economic activity are being profoundly changed by the growing array of policy initiatives, private-sector commitments and technology advances that aim to constrain greenhouse-gas emissions and limit climate change.

It is vital that investors understand how physical climate change and the energy transition affect the investment returns of the companies and markets in which they invest. We believe that doing so will enable us to build more resilient portfolios and generate better long-term returns for clients. Asset owners and regulators are also increasingly demanding this.

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America’s net zero opportunity

America’s net zero opportunity

Research from Princeton University plots a Blueprint for how the US can achieve net zero emissions in the next decade showing the key is overcoming execution challenges including the infrastructure deployment and the mobilisation of capital and labour.

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Portfolio alignment: How it influences decision making

This session looked at the unintended consequences of the portfolio alignment metric, and how investors can incorporate forward-looking views into their analysis and how it affects investment decisions.

Scenario analysis and investment strategy – the risks of climate

Scenario analysis shows that the ability of pension funds to pay their pensions will be severely impacted by climate.

Impact investing at a total portfolio level

This conversation explored how global institutional investors are approaching the challenge of balancing financial and impact goals.

SEC chair Gensler in favour of mandatory climate disclosure

SEC chair Gary Gensler is in favour of the regulator stepping in to bring greater clarity and consistency to corporate climate disclosure. Speaking at a PRI webinar he said the current level of disclosure doesn’t allow investors to compare corporate climate preparedness, and that much of the data is inconsistent. 

Finding alpha: Church Commissioners outperform

The £9.2 billion portfolio managed for the Church Commissioners for England has returned 9.7 per cent over 10 years through a focus on sustainability and a willingness to try things early, such as forestry and venture capital. Amanda White spoke to CIO Tom Joy about where the fund looks for alpha and the need for a non-traditional allocation.

Asset owners apply pressure on managers for net zero integration

The David Rockefeller Fund and Wespath Institutional Investors explain how they are engaging managers, and holding them to account, in the drive to net zero integration.

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