Blue & Green Tomorrow recently published Rich Pancost’s article on what climate change really looks like (see page 29 of the Guide to Sustainable Investing for full article).
If climate change is gradual, then the savvy investor should adopt a wait and see attitude. As warming continues, as damage gradually accrues and as political rhetoric (and regulations) grow sharper, investors can adopt different risk strategies, with some inevitably bailing out from high risk ventures too soon and others too late. But incremental change is not the forecast. Volatility is the forecast. There is strong evidence that warming is already amplifying heat waves, droughts and floods, which could create tipping points causing policy makers to switch gears from prevarication and incremental steps to the drastic policy changes. Investors should be able to trust that companies understand both systemic climate change risks as well as the associated policy and economic risks to their assets.