Content Package: Climate risk in the portfolio

Compliance reviewed April 1, 2022

Uploaded March 1, 2022

Position paper summary

Protecting Your Portfolio Against Climate Risk

For investors, climate change is not just about the state of Earth’s environment and the welfare of its inhabitants; it also represents substantial risk to investment portfolios.

With climate change comes climate risk—the potential for adverse impacts on businesses’ operations, financial performance, and reputation due to everything from changes in the physical environment (such as extreme weather) to more stringent environmental regulations that can increase the cost of doing business.

Blog #1 summary

Extreme weather and the portfolio

Extreme weather events can have a significant impact on the entire economic ecosystem, from individual companies to their supply chains to the broader financial markets. What used to be isolated “100-year storms” are now routine—a direct result of climate change, which is becoming a key consideration for investors.

Blog #2 summary

The investment risks posed by resource scarcity

Unbridled increases in resources are not realistic, as evidenced by drought conditions, food deserts in urban areas, and entire regions that have been destabilized by a lack of naturally occurring materials. The markets in which we invest, however, reflect the hope of continued growth.

This dissonance creates a collision course between the mathematical possibility of infinite exponential growth and the real world probability that we are, indeed, running out of resources.

Infographic summary

How does extreme weather bring risk to portfolios, and what role does ESG play?

This content will help you guide clients on questions they can ask to verify their investments help them achieve their ESG goals.

 

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