Climate change: energy transition to become a panic unless regulators, companies, investors move faster, LGIM says
- Kicking the can down the road has left the world behind on climate goals, says head of climate solutions at Legal & General Investment Management
- So far, investors have insufficiently priced in climate risks, which cannot be reduced via diversification or hedging, Nick Stansbury says
Policymakers, companies and investors have been kicking the can down the road when it comes to applying tough policies and action plans to mitigate global warming, as well as accurately pricing climate risks in asset markets, said Nick Stansbury, head of climate solutions at asset manager Legal & General Investment Management (LGIM).
Aside from the climate impacts of this lack of urgency, governments are risking much greater disruption later, and companies are missing an opportunity to be rewarded for being ahead of the curve, Stansbury said.
“The world is not on track for [limiting warming to] 1.5 degrees [Celsius] and probably not for 2 degrees, unless we see very significant policy responses,” he told the Post.
“What we should have been seeing over the past decade is for emissions from listed companies to be falling between 4 and 7 per cent each year, for them to be on pathways for the world to limit global warming to 2 degrees or 1.5 degrees, respectively. But data showed that their emissions were flat.”