Download This PaperClimate 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
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: Suggested Citation
