Four Key Issues
The last decade was hotter than any other period in the previous 125,000 years, attributable to rising greenhouse gas (GHG) emissions — principally carbon dioxide, methane and nitrous oxide — primarily released from the combustion of coal, oil and gas. Although these fossil fuels have powered dramatic economic progress in the global economy over the past hundred years, they have also increased the concentration of CO2 in the atmosphere, causing global warming. This, in turn, has contributed towards drought, famine, rising sea levels, extreme weather events, flash floods, all causing property damage and severe dislocation within communities — all with increasing frequency.
In a joint effort KPMG International, CREATE-Research, and Chartered Alternative Investment Analyst (CAIA) Association examine in detail the role of capital markets in the transition to a low-carbon world. The report, “Can Capital Markets Save the Planet?” investigates the experiences to date of climate investing and the changes we can expect in the next 3 years, as we move towards a new investment paradigm. The research includes insights from 90 institutional investors, alternative investment managers, long only managers and pension consultants in 20 countries in all the key regions.
The research highlights four key issues:
- What is the current state of organization’s progress with respect to climate investing?
- Based on organization’s experiences so far, are global capital markets adequately factoring climate risks in securities prices?
- Are capital markets likely to accelerate the pricing process, in response to Covid-19, and COP26?
- Over the next 3 years, which asset classes are likely to advance further in pricing climate risks?
For more detailed findings visit our global page.