In a climate-focused world, companies will be expected to have a credible transition plan for net zero emissions. Companies will be assessed on their future transition plans as well as on their progress with regards to their current carbon footprint, and regulatory and physical risks (the short- and long-term impact of climate change).
Climate transition planning and competency will become key areas of differentiation for companies — and key drivers for the valuation of all equities. In this shifting climate landscape, there will be re-ratings, valuation dislocations, and corporate winners and losers, which create an environment ripe for active stock-picking.
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