Schroders, operating from 41 offices in 27 countries, manages over $520 billion in assets globally. On Monday Schroders launched a new “dashboard,” designed to give investors a clearer understanding of the many complex climate-related investment risks, pointing out that without urgent action, the world is “accelerating towards a cliff edge.”
The Climate Progress Dashboard was developed to explain the various trends that mark our progress toward a decarbonized world. “It provides an objective and transparent view of change. It should help investors base decisions on the outcomes that are likely, rather than those they would like to see,” according to the website.
“Climate change will be a defining driver of the global economy, society and financial markets over coming years, decades and beyond,” wrote the author and head of sustainable investment at the company, Andrew Howard in a briefing letter accompanying the dashboard.
Howard notes that “whether the global economy is rebuilt on less carbon intensive foundations or the temperature continues to escalate, investors will be unable to avoid its impacts,” reports Investment Week.
Arguing that climate change is not a possibility, but is well under way, the report warns that “disruptive impacts” from climate change will become a bigger influence on corporate valuations with impacts being seen with the cash earnings for global companies.
The report also notes that action to tackle climate change is already underway across the globe, and this movement will bring challenges for investors and businesses, alike. And without a doubt, as the report warns, the shift to low-carbon and renewable technologies could leave many investors with “stranded assets.”
“Major changes lie ahead if countries ambitions are to prove close to being realistic. Emissions cuts on the scale needed have implications for every corner of economies and markets, not just those most obviously exposed,” reads the report. And this is one of the main purposes for the dashboard. It will help investors keep track of which industries are shifting to low-carbon business models.
The dashboard assesses 12 decarbonization metrics, including political action, public concern, climate finance, corporate planning, renewables deployment, and fossil fuel production. Using a broad, all-around view is important in assessing the different parameters because no single parameter is a barometer of success.
The report concludes that “while indications of progress are inconclusive and inconsistent, there is a clear and rising probability of rapid decarbonisation. Momentum is growing across the indicators we look at, with significant progress being made in many areas. Tracking these advances will be crucial in preparing for the investment impacts climate change will have.”
