ESG Viewpoint: The challenges of assessing physical climate risk
Insights

ESG Viewpoint: The challenges of assessing physical climate risk

Much of the investor focus on climate risk to date has been on managing ‘transition risk’, defined as the financial risk associated with changes in areas such as regulation, sentiment, or technology on the route to decarbonisation.

However, emphasis on the physical risks that arise from changes in weather and climate is ramping up, particularly after another summer of extremes. 

This year alone, China saw its most severe heatwave on record, leading to a power crunch and factories being shut. In the UK and Europe droughts were affecting ~60% of the landmass by August, placing agriculture at risk. Major rivers that serve as crucial transport and trade routes, like the Rhine, Po and Thames, experienced abnormally low water leading to severe restrictions of cargo ships. Wildfires caused thousands of evacuations, as an area across Europe equivalent to about one-fifth of Belgium was engulfed, with experts warning that this will be a record year of wildfire destruction. The forest fires also released millions of tonnes of CO2 into the atmosphere, reflecting the often exacerbating and circular nature of climate change and its impacts.

Interested in learning more?

Read more about why managing physical climate risk matters, the limitations of data and how we can respond.  Download the full viewpoint to discover more.

1 December 2022
Share article
Share on twitter
Share on linkedin
Share on email
Key topics
Related topics
Listen on Stitcher badge
Share article
Share on twitter
Share on linkedin
Share on email
Key topics
Related topics

PDF

ESG Viewpoint: The challenges of assessing physical climate risk

Risk Disclaimer

Views and opinions have been arrived at by Columbia Threadneedle Investments and should not be considered to be a recommendation or solicitation to buy or sell any companies that may be mentioned.

The information, opinions, estimates or forecasts contained in this document were obtained from sources reasonably believed to be reliable and are subject to change at any time.

Engagement efforts outlined in this Viewpoint reflect the assets of a group of legal entities whose parent company is Columbia Threadneedle Investments UK International Limited and that formerly traded as BMO Global Asset Management EMEA. These entities are now part of Columbia Threadneedle Investments which is the asset management business of Ameriprise Financial, Inc. Engagement and voting services are also executed on behalf of reo® clients.

true
true

Risk Disclaimer

Views and opinions have been arrived at by Columbia Threadneedle Investments and should not be considered to be a recommendation or solicitation to buy or sell any companies that may be mentioned.

The information, opinions, estimates or forecasts contained in this document were obtained from sources reasonably believed to be reliable and are subject to change at any time.

Engagement efforts outlined in this Viewpoint reflect the assets of a group of legal entities whose parent company is Columbia Threadneedle Investments UK International Limited and that formerly traded as BMO Global Asset Management EMEA. These entities are now part of Columbia Threadneedle Investments which is the asset management business of Ameriprise Financial, Inc. Engagement and voting services are also executed on behalf of reo® clients.

Related Insights

27 January 2023

Justin Ong

Senior Research Analyst, Asian Corporate Debt

Chuanyi Zhou

Asia Corporate Analyst

Firmer foundations for China’s property market in 2023

The Chinese property sector has been in the headlines over the past year, and not for the right reasons.
Read time - 6 min
25 January 2023

Steven Bell

Chief Economist, EMEA

Opening Bell 2023 – Global Market Outlook

We discuss how far interest rates could rise, assess the severity of any economic contraction, and look forward to opportunities as recovery emerges.
Read time - 6 min
24 January 2023

Fixed Income Desk

In Credit - Weekly Snapshot

In Credit Weekly Snapshot – January 2023

Our fixed income team provide their weekly snapshot of market events.
Read time - 3 min

You may also like

Investment approach

Teamwork defines us and is fundamental to our investment approach, which is structured to facilitate the generation, assessment and implementation of good, strong investment ideas for our portfolios.

Funds and Prices

Columbia Threadneedle Investments has a comprehensive range of investment funds catering for a broad range of objectives.

Our Capabilities

We offer a broad range of actively managed investment strategies and solutions covering global, regional and domestic markets and asset classes.

Thank you. You can now visit your preference centre to choose which insights you would like to receive by email.

To view and control which insights you receive from us by email, please visit your preference centre.