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    investment viewpoints

    Climate risk and opportunity by sector and geography

    Climate risk and opportunity by sector and geography

    The impacts of climate change are evident and affecting financial markets. 

    The Intergovernmental Panel on Climate Change has updated its projections and now estimates that limiting warming to around 1.5°C requires emissions to peak before 2025 at the latest, and be reduced by 43% by 2030. Even in a best-case scenario, the crisis also requires more funding to adapt to climate change.

    Rising temperatures present a series of quantifiable risks to markets. The three main categories of climate-related financial exposure are: transitional, physical, and liability risks. Physical risks represent a very uneven manifestation of climate change that requires a macro and sectoral approach to understand which regions and industries will be most affected, and where investment opportunities can be identified.  

     

    Exclusive analysis

    Lombard Odier’s recent Sustainable Finance Leadership Course, delivered in partnership with the University of Oxford, offered an assessment of how physical risks may differ by sector and geography.

    For key insights, explore the infographic below:

     

    important information.

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