The world’s deepest-pocketed investors are starting to take climate change seriously, according to Amundi SA.
“We are really observing a tipping point among the institutional investors on climate change,” said Frederic Samama, co-head of institutional clients at the Paris-based firm. “Until recently, that question was not on their radar screen. It’s changing, and it’s changing super fast.”
Risks from global warming range from damage to physical assets from extreme weather to falling prices on fossil fuel-related assets, as the world moves away from burning coal and oil. Bank of England governor Mark Carney has repeatedly warned that these risks are not priced in adequately and that investors may have exposure to a “climate Minsky moment” if they don’t take action.
The Paris climate deal reached by representatives from nearly 200 countries in 2015 sent a signal to the global economy that decarbonization was on the agenda. As just about every industry comes under pressure to become greener, the rules will change for the asset owners as well. France was the first country to make it mandatory for investors to disclose the carbon footprint of their portfolios, mandating it in a law the same year.
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