Time for transformation
Although far from a perfect outcome in terms of fighting climate change, there are parts of the Cop27 agreement that should give investors plenty to ponder when making long-term plans.
As it states: “About $4tn per year needs to be invested in renewable energy up until 2030 to be able to reach net-zero emissions by 2050, and that, furthermore, a global transformation to a low-carbon economy is expected to require investment of at least $4tn to $6tn per year.
"Delivering such funding will require a transformation of the financial system and its structures and processes."
This wave of capital in search of climate change solutions will be transformative, not just to the financial sector but the global economy as a whole.
So, although the risks of climate change are well understood, it is important to remember that 'keeping 1.5 alive' can also be a source of opportunity for your portfolio as well as the planet.
Lindsey Stewart is director of investment stewardship research at Morningstar
