@BNP Paribas Asset Management.
While the consequences of global warming are clear, with severe weather events, rising sea levels, etc. – the significant risks to economies and societies worldwide, the implications for business, infrastructure and supply chains, and what all this means for investors, need to be better understood.
Companies face physical risks from climate events as well as ‘transition’ risk from new climate policies, advancing technologies and consumer preferences. These can represent pressures on business, via rising costs, lost revenue, market shifts and possible default.
It can also be argued that opportunities arise for companies integrating climate considerations into their strategies and operations or offering emission-reducing products and services.
Investors, particularly institutional investors with diverse portfolios and long-term investment horizons, are acutely vulnerable to the systemic disruptions that climate change may cause. Climate risks and efforts to mitigate them are increasingly affecting the value of portfolios.
For institutional investors too, climate change presents potential opportunities – they can opt to invest in companies that provide solutions (products or services) to reduce GHG emissions or companies committed to aligning their operations with net zero goals. In other words, they can choose to bring their investments into line with net zero targets.
We see the role investors can play as a two-way street: the need to be aware of how climate change affects their investments, but also know how their investments impact the climate. As a result, they are pivotal when it comes to addressing climate change.
To help investors calibrate their approaches so that they can contribute to meeting global targets for net zero greenhouse gas emissions, BNP Paribas Asset Management has launched a handbook. Its aim is to offer investors practical guidance.
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