When it comes to climate risk, traditional scenario analysis leaves investors with more questions than answers and omits uncertainty around physical risk and the interaction between physical risk, inflation and tipping points. Investors need to abandon modern portfolio theory and find a new approach that focuses on short-term scenarios.
As western economies grapple with demographic shifts and labour mismatches, a new set of opportunities and risks have appeared for investors. PGIM thematic research group director Jakob Wilhelmus outlines what they should look out for in this new world order.
Clarity around capital allocation and defined investment frameworks have made labeled bonds a lucrative opportunity for many impact investors. However, Oyin Oduya, impact measurement and management practice leader at the $1 trillion Wellington Management said the reality is not that straightforward.
ESG-momentum matters when it comes to outperformance according to new research by Pictet Asset Management’s head of sustainability Eric Borremans who says investors should sharpen their ESG lens and use active ownership to trigger positive change.
A quarter of companies in CPP Investments’ public equity allocation still don’t report Scope 1 and 2 emissions – one of the most fundamental indicators of whether a corporate board is engaging on the climate emergency.
Climate risk remains systematically under-priced and the world isn’t on course for net zero. Investors need to prepare for the risks of climate and environmental change and re-evaluate the risk in their portfolios, University of Oxford researcher Nicola Ranger warned delegates to Sustainability in Practice.
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