Our perspective on global micro event and strategies.
From devastating floods in Australia — tragically, in many of the same areas hit by fires in recent years — to wildfires in Europe and the US, widespread disasters bring into stark reality the consequences today of a changing climate. The human toll of these events has become an unfortunate yet familiar part of the news cycle, but the second-order impacts of climate change on financial markets are sometimes less well understood. Many traditional approaches to climate investing have rightly focused on these risks, but we believe both their approach and their scope are often incomplete and lacking nuance, thereby creating inefficiencies in the climate-investing landscape.
In this piece, we outline our views on the climate opportunity set as climate change increasingly has the potential to disrupt entire industries.
The wall of capital pursuing ESG opportunities has been important in tackling these issues to date but also has had unintended outcomes for markets. This influx of capital is “good” in that it finances companies that we believe are already positively contributing to the mitigation of or adaptation to climate change. However, it mostly affects companies that…