While private assets like real estate may be the tip of the spear that will inevitably be impacted by climate in the next decade, MSCI expects for 2019 that eventually all assets may have to be judged by the potential impact of climate change.
The latest Intergovernmental Panel on Climate Change’s (IPCC) report on the impacts of global warming found that global emissions need to peak before 2030. It is a finding that puts investors on a timeline in which investment allocations made in 2019 will need to account for an accelerated carbon transition — or accelerated climate risk — at times before they finish paying out. If not, by 2040, the atmosphere’s temperature will have risen by 2.7 degrees Fahrenheit (1.5 degrees Celsius), inundating coastlines and intensifying drought, poverty and subsequent migration.
It is a finding that converges the time horizons for science and investment — and puts investors on a timeline in which investment allocations made in 2019
