Climate Risk Is Investment Risk

Journal of Environmental Law & Litigation, Forthcoming

Fall 2020 issue of the ABA's Natural Resources & Environment Magazine

6 Pages Posted: 23 Oct 2020

See all articles by Melissa K. Scanlan

Melissa K. Scanlan

UW-Milwaukee School of Freshwater Sciences; UW Law School

Date Written: October 14, 2020

Abstract

In January 2020, BlackRock, the world’s largest asset manager, announced it was placing environmental sustainability at the center of its $7 trillion investment approach. Having concluded that climate risk was investment risk, BlackRock predicted a very rapid movement of capital toward “sustainable” businesses. This action reflects a broader rethinking of the purpose of multinational corporations and their exposure to climate-related risks in light of the unprecedented need to swiftly decarbonize the global economy and meet the United Nation’s Sustainable Development Goals (SDGs). To avoid the worst scenarios of a climate-disrupted world requires extensive investment in mitigation and adaptation strategies in this decade. Companies that sit idly in the bleachers, instead of aggressively planning for a zero-fossil-fuel reality, run a greater risk of obsolete investments in “stranded assets.”

Keywords: climate change, stranded assets, investment, sustainability reporting, carbon reporting, TCFD, SDG, Sustainable Development Goals, IPCC

JEL Classification: G00, K00

Suggested Citation

Scanlan, Melissa K., Climate Risk Is Investment Risk (October 14, 2020). Journal of Environmental Law & Litigation, Forthcoming, Fall 2020 issue of the ABA's Natural Resources & Environment Magazine, Available at SSRN: https://ssrn.com/abstract=3711627

Melissa K. Scanlan (Contact Author)

UW-Milwaukee School of Freshwater Sciences ( email )

School of Freshwater Sciences
600 E. Greenfield Ave.
Milwaukee, WI 53204
United States

HOME PAGE: http://https://uwm.edu/centerforwaterpolicy/

UW Law School ( email )

975 Bascom Mall
Madison, WI 53706
United States

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