Summary of The Cost of Inaction

Recognising the Value at Risk from Climate Change

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The Cost of Inaction summary
The vast majority of asset managers view climate change as an environmental problem rather than an investment issue. Here’s why they are wrong.

Rating

9 Overall

10 Importance

9 Innovation

8 Style

Recommendation

Discussions about climate change typically focus on environmental impacts – storms, droughts, floods, and the like. Yet investment managers and investors around the world will feel the effects of climate change on their portfolios, in the form of weaker asset growth and lower returns. These losses could be severe, particularly if business and government fail to address the issue soon. This sobering report from the Economist Intelligence Unit puts some numbers on the financial and economic costs society will have to bear in the years to 2100. getAbstract recommends this cogent analysis to fund managers, investors and anyone who expects to draw a pension in the next 30 years or so.

In this summary, you will learn

  • How climate change could severely erode portfolio returns in the 21st century
  • Why asset managers should take into account environmental impacts on their investments
  • How some investors are including environmental sustainability in their investing criteria
 

Summary

Climate change exacts a direct financial toll when people and property suffer damage from storms, floods or droughts. But its indirect costs, in the form of impaired macroeconomic activity and sluggish growth, will ripple through all of society. The estimated value of worldwide assets managed by nonbank...
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About the Author

The Economist Intelligence Unit is an independent research and analysis organization.


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