Navigating low carbon pathways
The current economic and financial models used by the investment industry need to be reconsidered if the targets outlined in the 2015 Paris Climate Change Agreement are to be reached, according to a new report entitled Navigating low-carbon pathways from Hermes Investment Management. Doing so is the only way to address the valuation threats climate change poses to investment strategies, which is part of investors’ fiduciary responsibility to their clients. The report points to the important role investors have to play in closing the emissions gap between current commitments and the levels required to deliver a world in which global warming is limited to 2°C or less. However, while significant progress has been made, many investors have yet to fully integrate climate change into their investment decision-making processes and stewardship of companies and other assets.