“It is not just the physical or fundamental transmission of the sustainability-related risk or opportunity to financial markets that matters. Risks and opportunities can also be transmitted via the policy and controversy transmission mechanisms. These latter two mechanisms tend to crystallise world events into much more immediate-term market impacts,” write Schroders’ environmental economist Irene Lauro and multi-asset strategist Ben Popatlal in a note released on Aug 22.
Financial markets tend to view climate-related risks as long-term. But there are several factors that can impact portfolios within the coming few years — even months.
A new report by London-headquartered multinational asset manager Schroders lists five “market-moving sustainability risks” with the potential to impact the markets over the next six to 24 months.
