Beyond footprinting: How can investors manage carbon risks in their portfolio? (Sustainalytics)

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Institutional investors are facing increased pressure from customers, regulators and civil society to become more responsive to the threat of climate change. Over the last few years, there have been several developments that encourage investors to integrate risks associated with climate change into their decision-making (see timeline below). In addition to the impact of their investment, they need to address the effect climate change will have on their investment. This will manifest in both physical risk – through floods, draughts, extreme weather events, etc. – and carbon risk (also referred to as transition risk).

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In the midst of a global pandemic, Apple announced one of the corporate world’s most ambitious environmental blueprints – to reduce the climate impact of every Apple device to net zero by 2030. The plan involves cutting 75 per cent of the company’s existing carbon footprint, not only for its own business but also across the manufacturing supply chain and product life cycle.

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