Lisa Eichler

Last month’s IPCC report should be a call to action for investors - an incentive to start by creating net zero aligned and climate resilient portfolios. Portfolios need to be adapted to extreme weather and a disorderly transition. It is wonderful to see that many of our clients have already started on this journey. However, thinking through the financial impacts of various climate risk scenarios and creating a net-zero roadmap may feel somewhat overwhelming.

Last month’s IPCC report should be a call to action for investors - an incentive to start by creating net zero aligned and climate resilient portfolios. Portfolios need to be adapted to extreme weather and a disorderly transition. It is wonderful to see that many of our clients have already started on this journey. However, thinking through the financial impacts of various climate risk scenarios and creating a net-zero roadmap may feel somewhat overwhelming.

‘We are all in the gutter, but some of us are looking at the stars’, wrote the Irish playwright Oscar Wilde. The oft-quoted phrase came to mind when reading the influential reports by the Network for Greening the Financial System (NGFS) – a group of 91 central banks and supervisors that came with its second iteration of climate scenarios – and the Bank of England’s (BoE) second iteration of its Climate Biennial Exploratory Scenarios (CBES), both published this month.

Today, on Earth day, the Leaders’ Summit on Climate will underscore the urgency – and the economic benefits – of stronger climate action. It will be a key milestone on the road to the United Nations Climate Change Conference (COP26) this November in Glasgow.

At Ortec Finance, we will be monitoring the developments closely and of course will be including all the latest developments in our Climate MAPS & Climate ALIGN updates as companies and investors will have to adapt their own strategies and climate scenarios.

New Year, New US Presidency. Never has objective information on where the world is heading in combination with comprehensive scenario analysis been more important.

“We know that climate risk is investment risk. But we also believe the climate transition presents a historic investment opportunity.” Larry Fink, BlackRock, 2021
The global investment community is in agreement on the direction of climate action: Net Zero by 2050, which implies ensuring that your portfolio emits 7 – 10% less emissions each year from now until 2050. This is a big job, but a doable one. Here are five thoughts to help you on your way.