Scoring climate progress for investors: A high-frequency scorecard to track climate risk
The NGFS (network of central banks and supervisors for greening the financial system: https://www.ngfs.net/en) has defined three broad scenarios: Disorderly transition; orderly transition; and hot house world. Each map onto different levels of physical and transition risk.
ASR will track these transition scenarios via carbon emissions, renewables’ share of electricity and the carbon price.
We show the required change in each of the scenarios and then compare to the recent trend
Despite public rhetoric, ‘Current Policies’ (see chart) is the scenario we are currently heading towards, which implies a hot house world.
We highlight some of the cross-country divergences that are starting to appear and touch on the economic and investment implications.
Clients can read the full report HERE – 29 July 2022
Other related research for clients: Climate & Agriculture: Growing Risks – 22 July 2022
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