Sitra reincke kolle_16012018

Introduction

What is the aim of report:

• Summarize the dicussion on climate related risks

• Inform how climate risks will affect investments

• Give guidance on how to mitigate the risk

• Lay out a concrete path of how to proceed

Who should read it?

• Cities, municipalities, foundations, universities and other

portfolio holders.

• To mitigate risks globally everybody must be involved.

Climate risk increasingly affecting investment portfolios

Chart 1. Number of loss events

Source: Sitra & Munich RE

Initiatives to tackle the risks

posed by climate change march on

Article 173

WWF thrusts investors towards

science based portfolio alignment

What are the central investment risks?

REPUTATIONAL PHYSICAL TECHNOLOGICAL LEGISLATIVE SOCIAL

Increased frequency

of extreme weather

phenomena

worldwide

Increased amount

of problems related

to hot weather, sea

level rise

Change in

consumer behaviour

Emphasis on long-

term ownerhship

Declining

competitiveness of

smokestack

industries

Short-sightedness

related to

technological

development

Cost impacts of

sanctions and/or

taxes

Relative

competitiveness

impacts

Impacts of climate

change on

consumer behaviour

Investors’

commitment to

reducing

greenhouse gases

How does sustainability

affect companies’ operations?

Ability to

grow

Change in

consumer

behaviour

Changing patterns of

consumer behaviour

and the significance of

a good reputation

Costs

An unsustainable

growth model

weakens business

prospects.

This impacts the

ability to create

shareholder value

and cash flow

Cost of raw

materials and

carbon dioxide

emissions, a price

subject to upward

pressure.

Fines and

reputational risks

also raise the cost

level of financing.

What are the different investment strategies that can

be utilized?

The cost of action is low, the cost of inaction can be high.

Source: MSCI

Money flow to sustainable investments is accelerating

929

6 572

10775

18276

2128

8 723

12040

22890

Others USA Europe Total

2014 2016Billions $

Source: Global Sustainable Investment Review 2016

What should the cities, municipalities, foundations,

universities and other portfolio holders do?

1. Find out about your investment plan and how sustainability issues have been taken into

account.

2. Discuss your goals with all stakeholders.

3. Gather information with the help of partners.

4. Set sustainable investment goals and select an appropriate investment strategy.

5. Stick to the investment plan.

6. Follow up and measure development in relation to the goal set.

7. Update your investment plan at regular intervals (eg. annually).

Thank you.