The View | US, China should follow through on Paris Treaty commitments
Clear energy efficiency and emission standards coupled with consistent measurement, reporting of climate factors is crucial for carbon emission goals
G20 summits come and go without the world paying much attention. Yet the one recently held in Hangzhou, China, is worth noting. The US and China formally ratified the Paris Treaty on global warming, which aims to cut carbon emissions enough to keep global temperature increase below 2°C.
The US and China are together responsible for around two-fifths of global carbon emissions, so their ratification brings the treaty closer to the 55 per cent threshold needed for effectiveness.
It is a strong signal that governments intend to take action this time. Hence, I believe investors can no longer ignore climate change. Some may question the science, but all are faced with a tide of climate-related regulations and technological disruption. The good news: climate-aware investing is possible without compromising on traditional goals of maximising investment returns.
From an investor perspective, climate change creates risks and opportunities, in four main areas today:
● Physical: more frequent and severe weather events over the long term.
● Technological: advances in energy storage, electric vehicles or energy efficiency undermining existing business models.