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Brewing Storm: Are Investors Discounting Climate Risks and Opportunities?

May 2018
By Alan Hsu

Potential climate risks can create meaningful financial risks that may spell opportunity for investors.

 
  • We believe climate change is an asymmetric, systemic, and largely unaddressed risk for investors.
  • Climate-related asset repricing may be inevitable, potentially leading to widespread dispersion of security values.
  • In our view, investors do not need to believe in climate change to recognize that addressing the risks and opportunities in their portfolios is good capital stewardship.
  • Companies focused on climate change mitigation and adaptation may be an evolving investment opportunity set.
Alan Hsu
Equity Portfolio Manager, Hartford Environment Opportunities Fund and Global Industry Analyst, Energy, Renewables, and Utilities, Wellington Management

Investing involves risk, including the possible loss of principal. • Risks of focusing on investments that involve sustainability and environmentally responsible investment criteria may influence investment performance relative to the fund’s benchmark or competing funds and expose the fund to increased risks related to downturns or other adverse developments in that market segment. 

The views expressed herein are those of Wellington Management, are for informational purposes only, and are subject to change based on prevailing market, economic, and other conditions. The views expressed may not reflect the opinions of Hartford Funds or any other sub-adviser to our funds. They should not be construed as research or investment advice nor should they be considered an offer or solicitation to buy or sell any security. This information is current at the time of writing and may not be reproduced or distributed in whole or in part, for any purpose, without the express written consent of Wellington Management or Hartford Funds.

 

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