There is more than one C in ESG

Published by Pete Smith on

The landscape has materially changed in the last six months and not all of it has to do with Covid-19. 2020 has also been pressured by another ‘C’: climate change. Or, more accurately, climate risk.

There are two important points scheme investors must consider:

  1. Your own beliefs about climate change do not matter. If others believe it will have an impact and are changing what they do, the price of assets will change, and you will be affected. 
  2. Although the rise in global temperature creeps up slowly, its impact on asset values is already starting to have an effect, and the momentum behind this is increasing.

The question is, can your portfolio perform under the changing economic conditions? The impact of climate change is already being felt in the bond, property, commodity and infrastructure markets as well as equity markets. Therefore, many of us view climate change as a risk and something that must be aligned to other ESG investment factors.

"Climate change is no longer simply a social responsibility issue. It is a core financial risk impacting broadly across business, the economy and markets. Climate change is a risk to long-term sustainability pension trustees need to consider when setting and implementing investment strategy."
Charles Counsell Chief Executive, The Pensions Regulator

We believe that, like interest rates and inflation risks, it should be managed. In this note, we provide further background on the impact of climate risk, and discuss the actions you may wish to take.

Download our briefing note below to get up to speed. 

Download our briefing note

Want to know more about ESG investing?

Our new hub page provides advice on the regulatory ESG framework and client-focused solutions to help our clients with their ESG considerations. To learn more about ESG and how you can approach your investment meetings with confidence visit our hub page today. 

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