Investing in Times of Climate Change

Climate change has become a top issue for investors, but working out what sustainable funds are investing in and whether they are delivering on their promises is not always easy

Hortense Bioy, CFA 21 April, 2020 | 9:59AM

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If there is one lesson the coronavirus pandemic has taught investors, it is that the global economy can be brought to a sudden standstill by a large-scale unpredicted event. A parallel can be drawn with climate change, now widely recognised as a large systemic risk that will affect the global economy, and one which may affect investment portfolios in ways we can’t yet fully imagine or predict.

Climate change has become perhaps the biggest sustainability issue for investment portfolios. Investors are increasingly aware that greater climate variability and more frequent extreme weather events could have considerable effects on businesses. They are also recognising that the world must transition from a fossil-fuel-based economy to a low-carbon economy sooner rather than later.

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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

About Author

Hortense Bioy, CFA

Hortense Bioy, CFA  is director of passive funds and sustainability research in Europe for Morningstar

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