Our perspective on global micro event and strategies.
As Investment Director of Wellington's Climate Platform, Erika partners with our Climate Research team and advises clients on both transition and physical climate risks and opportunities across traditional and alternative asset classes. She contributes to climate-focused strategic client engagements and product development efforts across our Climate Product Platform.
The outperformance over the past 18 months of some “green” equities, or those with direct or obvious climate solutions (such as renewable energy), has left investors wondering whether climate transition risks are already priced in. A new study by MSCI finds that transition-risk pricing differs by region and by a company’s greenness, as measured by its greenhouse gas (GHG) emissions and proportion of “green” revenues.1 Even after normalizing for industry effects, equities with low GHG emissions and a higher share of revenues from “green,” low-carbon activities commanded higher valuations than equities with more “brown,” high-carbon-intensity revenues.
While we recognize the strong performance of certain green equities, we believe the lack of reliable emissions data makes it…