2. Identify and Explain the issue
Few investors factor in the impact that major global events will have on the value
of their investments, even though, over the long term, they are forecast to have a
huge effect on the way businesses succeed.
Climate change is one risk. Many investors may not even realise how much of
their portfolio is directly exposed to energy companies that will be affected by
global warming, and the regulation that is put in place as governments around the
world try to mitigate it.
3. How does this affect different investment options
By tilting your portfolio from companies that produce carbon emissions towards
those that try to reduce them, you may be able to protect against some of the
effects of climate change regulation on your portfolio.
People will invest in energy efficient companies and avoid fossil fuel companies as
they want to reduce the amount carbon and other harmful gasses entering the
atmosphere
4. Who Benefits from this problem
Companies that are eco-friendly will benefit from this problem as they will
promote ethical investing in their companies.
Ethical Investors will also benefit greatly as the ethical companies will become
more popular
Alternate energy source companies
Companies mining arctic Resources
5. Who gets negatively affected by this
Agricultural industry - Warmer climates affect growth of crops and healthiness of
cattle and other livestock. Also agricultural companies might be restricted to
amount of cattle they produce as cattle is one of the largest creators of
greenhouse gasses.
Tourism Industry - especially places that are heavily reliant on the surrounding
environment such as ski resorts and tropical resorts/ reef tours will be
significantly damaged economically.
Energy Industry - Companies promoting unsustainable energy sources will be
effected as ethical investors will avoid investing in them
Food Industry - For example the fish industry is affected as warming of the
