Low-carbon transition scenarios: Exploring scenario analysis for equity valuations
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👤HSBC
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As part of HSBC Global Asset Management’s ongoing assessment of the implications of climate change for our investment strategies, we commissioned Vivid Economics to undertake this analysis, to ensure we better understand the potential implications of a range of climate change scenarios. The approach developed is designed to assist and inform our analysis going forward. The transition to a lower carbon economy, consistent with limiting the global average increase in temperatures to just 2°C or the more ambitious 1.5°C above pre-industrial levels, presents both risks and opportunities for investors. The challenge, of course, is to identify and, if at all possible, quantify those risks and opportunities. While the imperative of the need to transition to a low-carbon economy is very clear, the nature of this transition is highly uncertain and it is this uncertainty which is probably the biggest challenge for investors.
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👤HSBC
