August 7, 2017
By: Dustyn Lanz
In his latest column for Investment Executive, RIA COO Dustyn Lanz positions climate change as a vital consideration for investors and investment professionals, noting that improved corporate disclosure is needed to help investors understand long-term climate-related risks and opportunities. View the excerpt below:
Turning climate concerns into action
Climate change represents a clear and present danger to long-term shareholder value. Responsible investors who represent trillions of dollars in assets under management (AUM) have recognized this for more than a decade and have worked to incorporate environmental, social and governance (ESG) factors into their investment decisions. For investors and their financial advisors, reliable data and tools are essential for understanding the risks and opportunities associated with climate change.
The potential impacts of climate change on the global economy are immense. A recent report from The Economist Intelligence Unit estimated that US$4.2 trillion in the current value of the world’s AUM is at risk from a four-degree celsius rise in global temperatures by 2100. In a scenario in which the global temperature rises by six degrees, that amount grows to almost US$13.8 trillion, or roughly 10% of the value of the world’s AUM.
There will be winners and losers across all sectors, so investors need reliable information about how each company is managing its exposure to climate risks. Accordingly, it is vital to understand what climate risks are and how they might affect businesses.
Read the full article here.