Quarterly Outlook
Macro Outlook: The US rate cut cycle has begun
Peter Garnry
Chief Investment Strategist
Head of ESG investments, Saxo Bank.
Source: ClimateDashboard-global-surface-temperature-graph-20230118-1400px | NOAA Climate.gov
What is climate change?
Climate change refers to long-term changes in climate, directly or indirectly attributed to human activity. The main driver of climate change is rising emissions of greenhouse gases (“GHG”) from burning fossil fuels like coal, oil and gas with carbon dioxide (CO2) being the most significant contributor to the warming effect.It’s important to note that many of the technological innovations, such as fusion power, carbon capture, and solar geoengineering, though promising, are still in early, experimental phases.
The regulatory measures and technological solutions will require extensive investments from public and private sectors and considerable changes to our ways of life. Climate change poses risks and opportunities, and a well-informed investor should be able to manage the former and take advantage of the latter.
Investors can benefit from climate change by investing in companies or sectors that take positive action and provide mitigation and adaptation solutions to climate change. Examples include clean energy or renewable energy (wind, solar, biofuels), low-carbon transportation (electric vehicles), sustainable agriculture, or clean cooling systems. Participating in climate investing is an effective way for investors to take positive action in the fight against climate change, while potentially enjoying a financial upside, which is an attractive value proposition.