Climate Change: Investment Risks and Opportunities

Significant spending on sustainable infrastructure and government incentives are needed to meet emissions targets. These present large investment risks and opportunities

BlackRock 13 September, 2016 | 4:19PM
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Morningstar's "Perspectives" series features investment insights from third-party contributors. Here, Richard Turnill, BlackRock’s Global Chief Investment Strategist, explains why he thinks all investors should consider incorporating climate-change awareness into their investment processes.

A tide of new regulations to combat climate change is rising. The risks are underappreciated, yet could soon start to unfold. Significant spending on sustainable infrastructure and government incentives are needed to meet emissions-reduction targets. These present large investment risks and opportunities.

Most countries have signed the Paris Agreement to limit global warming to less than 2°C above pre-industrial levels — the threshold where many scientists see irreversible damage and extreme weather effects kicking in. The countries have submitted plans to reduce carbon emissions in so-called intended nationally determined contributions. Yet scientists say these commitments alone are not enough to keep temperature rises below 2°C.

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BlackRock  has assets under management totalling $3.8 trillion across equity, fixed income, cash management, alternative investment, real estate and advisory strategies (as at 31 December, 2012).

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