How Low Carbon Strategies Are Gaining Momentum


European pensions are the pioneers of the institutional investor low carbon sector. This is changing, as more institutional investors are factoring in climate change risk and returns from low carbon investment strategies. U.S. pensions are taking another look at these responsible investing tactics. From a listed equity standpoint, there is a risk of carbon emissions generated by companies and the current and future costs associated with it. Carbon-stranded assets are assets that may lose economic value ahead of their expected life because of changes in regulations, market forces, environmental concerns, market innovation or societal norms. These assets are being identified by service providers and investors and their financial impact is wreaking havoc on companies. For example, in February 2014, GDF Suez SA, France’s largest natural gas supplier, wrote of €14.9 billion, with a majority being written off from impairments on European power assets. Another example is RWE AG, Germany’s second largest utility, in January 2014, wrote down €4.5 billion as power plant earnings fell.

Coal Companies Get Smacked

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