Research by the United Nations suggests that the planet is on a trajectory for a temperature rise of between 2°C and 4°C by 2100, which would have devastating impacts on ecosystems and human health. Long-term investors can no longer afford to ignore the significant tail risks caused by climate change. By applying a climate lens to portfolio construction, we believe they can identify companies with business models that mitigate climate risk. This can benefit returns and support the move to a low-carbon future.
In this article, our head of ESG research and integration, Canada, and our senior portfolio manager, Canadian fundamental equity, discuss how through the application of science-based targets, we think the Paris Agreement can provide a suitable framework for investors seeking to align their portfolios with the overarching goal of curbing carbon emissions rapidly.
Proud to be Canada’s only member of the UN PRI Leaders’ Group 2020,
for excellence in climate reporting