INVESTING IN A TIME OF CLIMATE CHANGE: 2015 STUDY

Climate change presents risks expected to have their greatest impact in the long term.  But to address it, change is needed now. This presents asset owners and investment managers with both risks and opportunities.  "Investing in a Time of Climate Change" is a report summarizing the findings of a major study to address three key investor questions. 

Looking Long Term. Thinking About Tomorrow, Today.

SPOTLIGHT ON: STUDY FINDINGS


Jane Ambachtsheer, Global Chair, Responsible Investment, outlines the key findings that emerged from the Mercer led study ‘Investing in a Time of Climate Change.

CLIMATE CHANGE STUDY: RISK FACTORS - T R I P


Mercer has identified four climate change risk factors, which serve as “lenses” through which we can sharpen our focus on the future investment implications of climate change for investors.

TECHNOLOGY (T)
Broadly defined as the rate of progress and investment in the development of technology to support the low-carbon economy.

REASOURCE AVAILABILITY (R)
Defined as the impact on investments of chronic weather patterns (e.g. long-term changes in temperature or precipitation).

IMPACT (I)
Defined as the physical impact on investments of acute weather incidence/severity (i.e. extreme or catastrophic events).

POLICY (P)
Broadly defined as all international, national, and sub-national targets; mandates; legislation; and regulations meant to reduce the risk of further man-made or “anthropogenic” climate change.

CLIMATE CHANGE STUDY: SCENARIOS


The future scenarios most relevant to investors outline a range of what's possible, providing several viewpoints of how the next 35 years might play out and what we need to prepare for, starting now.


 

TRANSFORMATION
More ambitious climate change mitigation action that puts us on a path to limiting global warming to 2°C above pre-Industrial era temperatures this century.

 

COORDINATION
Policies and actions are aligned and cohesive, keeping warming to 3°C above pre-Industrial era temperatures this century.

 

FRAGMENTATION
Limited climate action and lack of coordination result in warming rising to 4°C or above from pre-Industrial era temperatures this century. This is divided into two scenarios - one assuming lower economic damages, the other assuming higher damages.

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