Addressing the Climate Challenge

Environmental factors are posing material risks—and creating opportunities—for companies around the world. Climate-focused investors seek to back investments that can help slow the pace of climate change and mitigate its impacts, while capturing strong return potential. 

But climate investors face a crucial first step identifying portfolios that are specifically designed to help address material climate risks, based on companies and governments that are genuinely striving to reduce their negative impacts on the environment.

The Challenge

To reach net zero by 2050 and limit the rise in global temperatures, the world needs to decarbonize everything from power generation to transportation to manufacturing. We must also build resilience against the physical impacts of climate change by investing in infrastructure, food availability and water security.

This creates challenges, but we believe that skilled portfolio managers have an opportunity to: identify the industries that are key to addressing climate risks and the companies that are already generating green revenues or have ambitious transition plans for their businesses; make material environmental, social and governance (ESG) factors a key component of their investment process; and engage with companies’ management teams and with government representatives to get insights into their climate planning.