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Focus on transition risks complements existing physical-risk capability
BOSTON, HONG KONG, SINGAPORE & SYDNEY, January 28, 2022 — Wellington Management and the Joint Program on the Science and Policy of Global Change at the Massachusetts Institute of Technology today announced the formation of a climate change research collaboration. The alliance will bolster Wellington’s current research on the transition to a low-carbon economy, enhance its understanding of the expected financial impacts of various transition pathways on industries and economies, and deepen its decarbonization engagement practices.
The MIT Joint Program’s integrated team of natural and social scientists aims to provide Wellington’s investment teams with comprehensive climate change projections under various environmental, economic, and policy scenarios. The objective of this research is to outline decarbonization pathways for corporate operations, supply chains, and products, while also assessing their potential economic impacts. Wellington’s investment teams plan to integrate these transition-risk findings into their ongoing fundamental research, in conjunction with physical-risk findings from Woodwell Climate Research Center, a leading independent climate-science research organization.
Wellington has long believed climate change has the potential to significantly impact economic and market outcomes. The firm launched its first climate-focused investment strategy in 2007 and has continued to expand its climate research capabilities. In 2018, Wellington initiated its collaboration with Woodwell to help bridge the gap between climate science and finance. In December 2020, Wellington became a founding member of the Net Zero Asset Managers initiative, assessing decarbonization pathways on a strategy-by-strategy basis and working with individual clients on their net-zero goals.
According to Chris Goolgasian, Director of Climate Research at Wellington, “Our collaboration with the MIT Joint Program will focus on cutting-edge transition-risk research outlining the economic risks and opportunities associated with climate change. The pace of change and innovation in this field demands that we collaborate with and learn from leading climate-science experts to further inform investment decisions.”
“We look forward to applying the MIT Joint Program’s capabilities to assess many complex socio-economic relationships and feedbacks, from changes in technology to evolving global and local policy actions,” says Sergey Paltsev, Deputy Director of the MIT Joint Program. “We hope that our collaboration will deepen understanding of potential decarbonization paths and associated global investment implications.”
Tracing its history to 1928, Wellington Management is one of the world’s largest independent investment management firms, serving as a trusted adviser to over 3,200 clients in more than 60 countries. The firm manages more than US$1.4 trillion for pensions, endowments and foundations, insurers, family offices, fund sponsors, global wealth managers, and other clients. As a private partnership whose only business is investment management, the firm is able to align its long-term views and interests with those of its clients. The firm offers comprehensive investment management capabilities that span nearly all segments of the global capital markets, including equity, fixed income, multi-asset, sustainable investing, and alternative strategies. With more than 800 investment professionals located in offices around the world, Wellington pairs deep multi-disciplinary research resources with independent investment teams operating in an entrepreneurial “boutique” environment. For more information about the firm or its sustainable investing efforts please visit www.wellington.com or www.wellington.com/en/sustainable-investing.
The MIT Joint Program on the Science and Policy of Global Change is working to advance a sustainable, prosperous world through scientific analysis of the complex interactions among co-evolving, interconnected global systems. To help nations, regions, cities, and the public and private sectors confront critical challenges in future food, water, energy, climate, and other areas, the MIT Joint Program’s integrated team of natural and social scientists produces comprehensive global change projections under different environmental, economic and policy scenarios. These projections help decision-makers to assess impacts, and the associated costs and benefits of potential courses of action. For more information, visit https://globalchange.mit.edu/.
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Source: Wellington Management
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