Climate Transition Tool 2.0: Bridging gaps, enhancing sectoral ... - Goldman Sachs
Climate Transition Tool 2.0: Bridging gaps, enhancing sectoral scope, highlighting performance links
Investors are increasingly focused on quantifying the transition progress of corporates based on the 3Ps – Plan, Path and Performance. Goldman Sachs Research analysts update their Climate Transition Tool, which continues to be applied across more than 7,000 publicly-traded companies. The analysts see clear preference for greater ESG fund ownership of Climate Transition Transparency/Performance leaders, with Top Quintile (Q1) companies +49%/+60% overweight in ESG funds vs. benchmark weighting, respectively.
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Related Knowledge Center: Climate economics
Climate change is now a driver of the world’s economy. The impact is profound:
- Catastrophic weather events — hurricanes, floods, droughts, high temperatures — are more frequent and more extreme. The cost can be measured in both the initial damage caused and the longer-term impact on the economy.
- Vulnerable communities are increasing climate-related investments, hardening infrastructure and taking other protective measures.
- Investment in carbon capture and storage technologies is increasingly rapidly.
- Governments are making investments and crafting regulations to reduce emissions of carbon dioxide and other greenhouse gases.
On top of all of this is the cost of uncertainty. As the Fourth National Climate Assessment, released in 2018 by the U.S. Global Change Research Program, says, “The assumption that current and future climate conditions will resemble the recent past is no longer valid.”