Climate change strategies: Beware obsolescence

Climate change is now central to politics and public discourse. But a surprising number of investors continue to take a business-as-usual approach to investing, presenting a blind spot that can put portfolios at risk. Those who are looking at the issue often find the debate framed around the risks of exposure to carbon-intensive industries, while the downside of missing out on the green success stories of the future are less discussed.

By our measurements at FTSE Russell, the green economy comprises 6% of the market capitalization of global listed companies, valued at approximately $4 trillion. By any standard this would represent a significant investment opportunity, while ignoring it could be a very substantial investment risk.

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