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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Scoring climate progress for investors: A high-frequency scorecard to track climate risk