Monday, February 21, 2011

New Deutsche Bank report: 'Investing in Climate Change 2011'

Deutsche Bank Asset Management: A DB Climate Change Advisors (DBCCA) report released today, "Investing in Climate Change 2011", examines the risks associated with climate change investing across different asset classes and provides a framework to understand how asset managers can manage these risks. In the report, DBCCA argues that a major shift in investor attitudes is taking place: leading institutional investors around the world to undertake this analysis because of a growing realization of the potentially profound impact climate change may have on their existing portfolios.

"Institutional investors are giving greater consideration than ever before to climate change in their assessment of asset allocation," said Kevin Parker, Global Head of Deutsche Bank's Asset Management division (DeAM) and a member of Deutsche Bank's Group Executive Committee. "I believe that we have reached a critical point in our industry at which all the talk about climate change begins to translate into action. Asset owners everywhere are starting to move and naturally their first impulse is to identify where in their portfolios the climate risk lies. To do so effectively and efficiently, they need a new intellectual framework and set of tools. And they need them now."

The report, DBCCA's fourth annual review of the climate change investment market, points out that 2010 was the largest year on record for investment in clean energy and globally, the investment opportunity steadily continues to improve.

…The report identifies eight key trends which will influence investors' capital allocations over the next year:
  • The climate change megatrend persists.
  • A more sophisticated exploration of climate change risk within portfolios.
  • Policy is a key driver for cleaner energy.
  • The ambitious scale, scope and commitment of Chinese leadership will foment structural change in clean technologies.
  • Investors will look to US state projects rather than projects driven by Federal policy.
  • Natural gas as a lower-emission transition fuel in the US.
  • The risk-return profile in the climate change sector varies between asset classes.
  • Global policy makers recognize the need for more in-depth dialogue to explore how public and private partnerships can support renewable energy scale-up in developing countries.
Victor Korniyenko created this global map of average temperature change, with a time frame of either "2000-2009" or "1950-1980". Wikimedia Commons, under the Creative CommonsAttribution-Share Alike 3.0 Unported license

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