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Climate change could change everything
Because we believe climate change poses risks to economies, markets, and therefore, our clients' portfolios, we seek to study the science, engage with clients and companies, and develop related tools and investment approaches.
Robust climate science collaboration
We believe climate change will impact capital markets, creating new risks and opportunities. Working with Woodwell Climate Research Center, one of the world’s leading independent climate research institutes, we research physical climate risks and integrate science-based insights and projections into investment decisions made on our clients’ behalf.
Our climate commitment and approach
Deep climate research
Working with Woodwell has helped us understand the inextricable linkages between these climate risk categories. We engage with companies to help them build resiliency to both.
Risks
HeatHurricanesDroughtsFloodsWildfiresWater scarcitySea-level rise
Financial impacts
Wider credit spreadsAgricultural damageBusiness revenue riskInfrastructure riskInsurance riskStressed health care systems
Opportunities
Water treatmentSustainable constructionRenewablesResilient infrastructureClimate-resilient cropsEnergy storage
Risks
Carbon taxesEmissions-trading systemsLand-use regulationEnvironmental malpracticeClass-action lawsuitsElectrificationTechnologyConsumer activism
Financial impacts
Changing cost of capitalReal estate devaluationDevaluation in fossil-fuel-heavy industriesSovereign downgrades
Opportunities
Smart/automated gridsElectric vehiclesLogistics softwareSensors/monitorsEnergy efficiency solutionsInsurance innovation
FOUNDING MEMBER OF NET ZERO ASSET MANAGERS INITIATIVE
We intend to partner with asset owners on their decarbonization goals, in recognition of the potential impact of the low-carbon transition on security valuations. This opportunity enables us to deepen engagements with portfolio companies and enhance consultative partnerships with clients.
CLIMATE ACTION 100+ MEMBER
REPRESENTATION AND ADVOCACY
- U.S. Commodity Futures Trading Commission: Our director of climate research sits on the CFTC’s Climate-Related Market Risk Subcommittee and contributed to its 2020 report, “Managing Climate Risk in the U.S. Financial System”
- US Securities and Exchange Commission: We’ve shared our insights on the need for greater transparency on company-level climate-related risk in a recent letter to the SEC.
- We published P-ROCC 2.0, extending our 2019 Physical Risks of Climate Change framework. P- ROCC 2.0 advocates for disclosing the location of physical assets associated with company operations to help investors more fully assess climate-risk exposure.
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INVESTOR TOOLS TO FACILITATE CLIMATE INTEGRATION
Extensive collaboration among our research teams has resulted in a set of innovative tools that enable our investors to integrate data on physical and transition risks into investment decision making.
CLIMATE MAPPING SOFTWARE
Climate Exposure Risk Application (CERA)
Our geospatial finance tool enables our investors to isolate or combine views of seven climate factors — heat, drought, floods, hurricanes, wildfires, water access, and sea-level rise. Overlaying this data onto geographic maps helps our investors identify “hot spots” that warrant further fundamental research.
CLIMATE MAPPING SOFTWARE
Mapping the impact of climate change
In this three-minute video, we share the climate-exposure risk-analysis tool we have developed in partnership with Woodwell Climate Research Center. This software helps our investment teams track and assess physical climate risks facing capital-market assets around the world.
INVESTOR TEAM DASHBOARDS
Net-zero dashboard
This one-stop view is designed to help us monitor progress toward our net-zero milestones by combining climate-relevant data from company engagements (including holdings with science-based targets) and portfolio construction (including weighted-average carbon intensity).
INVESTOR TEAM DASHBOARDS
Peer carbon-emissions dashboard
This dashboard facilitates comparison of companies against peers and average industry intensity. It includes the historical trend of Scopes 1 and 2 emissions intensity, as well as Scopes 1, 2, and 3 intensity figures, leveraging estimated Scope 3 datasets.
