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What is climate investing?
At Wellington, climate investing focuses on companies addressing climate change through adaptation, mitigation, or innovation. Our work with Woodwell Climate Research Center confirms that society is vastly unprepared for climate change, and we expect demand for climate innovations to increase significantly. Companies that position themselves to be part of the solutions could gain market share and build competitive advantages, while those that fail to respond to the climate challenge could lag.
Reasons to invest
We believe climate change is both an underappreciated capital-market risk and an investment category with significant asset mispricing.
Decarbonizing the global economy and helping society adapt to climate change will require a range of solutions across sectors. In our view, many climate solutions are in the early stages of growth and projected to see rising demand in coming decades.
- Technology is lowering costs and accelerating innovation and time-to-scale
- Policy and regulations are driving companies to reduce carbon footprints, develop transition plans, and improve climate reporting
- Some consumer preferences are shifting toward low-carbon, climate-friendly choices
- Shareholders are seeking action and improvement to reduce climate-related risks
Broad opportunity set
Decarbonizing the economy and adapting to climate change will require a vast array of technology and solutions from many sectors. Examples of adaptation and mitigation solutions include:
- Low-carbon electricity
- Low-carbon transport
- Utility and grid resilience
- Climate-resilient infrastructure
- Energy efficiency solutions
- Sustainable agriculture
- Water and resource management
- Cooling systems
- Backup power
- Flood control
Our climate approaches
We continue to build out our climate platform with strategies that invest in various areas of climate resilience and the low-carbon transition.
- Physical-risk adaptation
- Transition-risk mitigation
- Climate technologies
Other climate-sensitive opportunities include:
- Low-carbon/Paris-aligned equities and fixed income
- Climate-aware municipal bonds
- Climate-aware real estate
- Sustainable commodities
Contact the sustainable investment team
For more information on our sustainable investment solutions, speak with a member of Wellington's sustainable investment team.
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