abusesaffiliationarrow-downarrow-leftarrow-rightarrow-upattack-typeburgerchevron-downchevron-leftchevron-rightchevron-upClock iconclosedeletedevelopment-povertydiscriminationdollardownloademailenvironmentexternal-linkfacebookfiltergenderglobegroupshealthC4067174-3DD9-4B9E-AD64-284FDAAE6338@1xinformation-outlineinformationinstagraminvestment-trade-globalisationissueslabourlanguagesShapeCombined Shapeline, chart, up, arrow, graphLinkedInlocationmap-pinminusnewsorganisationotheroverviewpluspreviewArtboard 185profilerefreshIconnewssearchsecurityPathStock downStock steadyStock uptagticktooltiptwitteruniversalityweb

5 Feb 2016

Jon Williams, PwC, Business Green

PwC argues in light of COP21 decisions, investors should assess risks of the transition to a low-carbon economy

"Climate risk and financial services – the road from Paris", 3 Feb 2016

…The climate agreement…recognises the big gap between the overall global goal and current national climate policies and emissions targets…[B]usiness faces both the risks arising from increasingly ambitious policies and regulations designed to reduce emissions…and the physical risks implied by 3 degrees of warming…Thermal coal is especially vulnerable…Over time, the national climate plans should raise the relative value of lower carbon investment…One reaction to these climate policy risks has been to simply divest from fossil fuels…[A] rapid low carbon transition poses a potentially material risk to financial institutions that manage carbon intensive assets or liabilities…This presents a strong business case for quantifying and actively managing climate risks in investment portfolios, including stock selection and the focus of company engagement…By…being able to compare climate risk against other risks, a pension fund will be in a better position to manage its climate risk exposure…