Is a Climate Strategy a Necessity for Asset Owners?
IN THIS LESSON
Why is it crucial for leaders at asset owners to understand the fundamentals of climate science?
First, it helps us grasp the gravity as well as the complexity of the current situation.
The world is experiencing more frequent and severe climate impacts, including severe weather, heat waves, flooding and wildfires, driven by greenhouse gas emissions primarily from human
activities like burning fossil fuels and deforestation.
Climate science is the impetus for global agreements like the Paris Agreement to orchestrate a response and limit global warming to 1.5C (at most 2.0C) warmer than before the industrial revolution by 2100.
Actions at the global level eventually trickle down to the financial sector, capital markets and any investments asset owners make.
Climate science is also at the heart of the projections of future climate change to help asset owners anticipate potential risks and opportunities
Some studies show that climate-related risks have yet to be fully reflected in the pricing of securities on the stock markets of the world.
The transition to net zero will create winners and losers. Those in position of power at asset owners who have a deeper knowledge of climate science, can guide their portfolios to remain resilient and in a better position to meet their ongoing long-term liabilities to their beneficiaries.
