Climate Change Opportunities

Martin Currie: David Sheasby, Head of Stewardship & ESG, explores how efforts to limit climate change and the transition to a lower-carbon economy present a range of opportunities for investors.

David Sheasby

David SheasbyHead of Stewardship and ESG

PREVIEW

As we have outlined in our previous paper (Climate change – an inevitable risk), the impacts of climate change and the transition to a lower-carbon economy present significant social, economic and investment challenges. In this short paper we look at the other side of the coin, exploring some of the potential opportunities which are now being presented across a wide range of industries. These include: the recasting of the energy system; the increasing focus on efficiency; new products and technologies; and infrastructure and real estate.

We investigate the need for companies to build resilience, but also highlight the barriers that are standing in the way of these opportunities being embraced.

Read the full report


DEFINITIONS

CDP is a not-for-profit charity that runs the global disclosure system for investors, companies, cities, states and regions to manage their environmental impacts

Environmental, Social, and Governance (ESG) refers to the three central factors in measuring the sustainability and societal impact of an investment in a company or business.

The European Green Deal is a set of policy initiatives by the European Commission with the overarching aim of making Europe climate neutral in 2050. An impact assessed plan will also be presented to increase the EU's greenhouse gas emission reductions target for 2030 to at least 50% and towards 55% compared with 1990 levels. The plan is to review each existing law on its climate merits, and also introduce new legislation on the circular economy, building renovation, biodiversity, farming and innovation.

The Intergovernmental Panel on Climate Change (IPCC) is an intergovernmental body of the United Nations that is dedicated to providing the world with objective, scientific information relevant to understanding the scientific basis of the risk of human-induced climate change, its natural, political, and economic impacts and risks, and possible response options.

The Paris Agreement is an agreement within the United Nations Framework Convention on Climate Change (UNFCCC), dealing with greenhouse-gas-emissions mitigation, adaptation, and finance, signed in 2016. The agreement's language was negotiated by representatives of 196 state parties at the 21st Conference of the Parties of the UNFCCC in Le Bourget, near Paris, France, and adopted by consensus on 12 December 2015. As of February 2020, all 196 members of the UNFCCC have signed the agreement and 189 have become party to it. Of the seven countries which are not party to the law, the only significant emitters are Iran and Turk

The UN Principles for Responsible Investment (PRI) is an international organization that works to promote the incorporation of environmental, social, and corporate governance factors (ESG) into investment decision-making.

The UN Sustainable Development Goals (SDGs) are the blueprint to achieve a better and more sustainable future for all. They address the global challenges we face, including those related to poverty, inequality, climate, environmental degradation, prosperity, and peace and justice.