How Zero-Washing Undermines The Impact Of Net Zero Investment Portfolios
By Tamara Close
A featured article of our October 2021 edition of PRMIA's Intelligent Risk quarterly newsletter
A key transition risk from climate change is a material global rise in the price of carbon. A carbon price shock at just $75 / ton of CO2e will impact over $20 trillion of Enterprise Value through a greater than 5% decline in their return on capital.1 Implementing carbon budgets or creating net zero portfolios can help reduce this risk. However, managers need to ensure that they are not “zero-washing”.
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