The report marks one of the first attempts to model sector-specific investment risks from climate change over decades. If warming is limited to no more than two degrees, coal and other fossil fuels lose the most in value, because countries have shifted toward cleaner energy. If temperatures rise further, sectors with the biggest losses will include industrials and agriculture.
“Asset owners should consider climate change at every stage of the investment process, from investment beliefs, policy and process to portfolio construction decisions,” said Deb Clarke, global head of investment research for Mercer, which is owned by Marsh & McLennan Cos. Inc.
The warning is the latest from the financial sector of the physical and financial risks posed by rising temperatures. While some investment strategists think climate change will offer opportunities, others warn of physical and social damage cascading across the economy.
Read full article and see good chart here.