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.
Research that looks at the relationship between economic transparency and defining investment qualities such as yield spreads, credit ratings and stock price volatility shows sovereign transparency helps improve the value of assets, enables countries to lower their borrowing costs and achieve a better credit rating.
Inflation holds investor opportunities as well as perils. Emerging markets, commodities and linkers do well in a climate of rising prices while central banks are likely to act quickly and aggressively in response rather than early or gradually.
The unprecedented level of government debt signals sub-par economic growth ahead, warned Farouki Majeed, chief investment officer, Ohio School Employees Retirement System speaking at FIS Digital alongside Rich Randall, head of global debt at IFM Investors.
Inflation is the number one investor concern and whether it is here to stay was the subject of much debate at the Fiduciary Investors Symposium. While its longevity is contested it was agreed that its presence has important implications for the correlation between bonds and equities which creates problems for portfolio design. Investors at PGIM, QMAW, CPP Investments and NEST discuss.
In an unequivocal message to boards that climate inaction could cost them their positions, Exxon shareholders voted this week to replace atleast two of its directors with those that have experience in climate transition. It is a win for CalSTRS which has been vocal in its support of Engine No.1, the activist hedge fund that put forward the alternative directors. The proposal was also supported by CalPERS and New York State Common Retirement Fund.
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