The tipping point for climate finance

COVID-19 has reminded investors of the importance of defensive positions within portfolios during times of stress. But are the ‘safe havens’ of the past still up to the task?

COVID-19 has thrown new light on the interdependencies in human and natural ecosystems, and the vulnerabilities of a closely networked world. Aviva Investors’ responsible investment specialists ask whether this will prove a turning point for environmental, social and governance issues.

While global policymakers around the world have acted with unprecedented speed and force to the COVID-19 pandemic, their actions are unlikely to prevent the world falling into the deepest recession since World War II.

While the COVID-19 pandemic may be unlike anything financial markets have experienced before, the past still offers valuable lessons for investors trying to make sense of the crisis, explains Euan Munro.

The devastating coronavirus outbreak has prompted renewed discussion of “black swans”: rare, unexpected events that wreak havoc on markets and economies. But is COVID-19 really a black swan? And to what extent can investors ensure their portfolios are resilient to sudden shocks of this kind?

The human cost of COVID-19 is likely to rise significantly, along with its impact on economies and financial markets as nations enact measures to contain its spread. We summarise recent developments and what they might mean for European real assets markets.

With the start of the consultation for proposed changes to the measurement of inflation in the UK, we look at the likely impact to asset classes, the assets most affected, and the key issues investors should be aware of.

More than 40 years since a senior NASA scientist told US Congress of concerns about human activities disrupting the climate, experts are warning of an impending climate catastrophe and the financial sector is wrestling with the implications.

As active investors step up their engagement efforts on the climate crisis, discussions need to be at the CEO rather than board level, argues David Cumming.

Psychological barriers can prevent people from acting to avert the climate threat, even when they recognise the problem. So how can we best engage individuals, companies and communities in the quest for solutions?

Until recently, many investors made light of dire warnings of the risks posed by assets becoming “stranded” by climate change. However, as the threat becomes reality, fears are mounting that whole industries could be wiped out.

With governments urged to do more to tackle climate change, carbon taxes are being touted as a politically expedient solution.