Thursday, May 26, 2022

Investors Need Not Worry about Climate Risks

Stuart Kirk, the global head of responsible investing at HSBC Asset Management, gave a short and provocative talk on why climate risk will not seriously affect investors (click here for the YouTube page). Short at under 17 minutes and provocative enough to get him suspended (I am glad my university still claims to support academic freedom.)

Key takeaways of his talk: 

  • The most dire forecasts have climate change reducing GDP by 5% over 100 years but this is relative to to a forecast of a 1000% increase (similar to the previous 100 years)
  • Despite continued dire warnings, financial markets hardly respond
  • In order to get the dire forecasts demanded by regulators, banks must "cook the books"

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