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Sustainable Investment

The impact of climate change on the global economy is likely to be significant and long-lasting.

Cambridge Econometrics is a world leader at quantifying climate-related financial risk, serving a broad range of the world’s biggest banks and investors.

Quantifying climate-related financial risks

Our economists can map out the scale and distribution of climate-related risks, over time, by economic sector and by geography.

We use a model of the global economy to quantify exposure to climate-related risk. Developed over 20 years ago E3ME was designed by Cambridge Econometrics specifically for this type of analysis and is continually updated and refined. It can:

Test the impact of different global temperature pathways (1.5˚C, 2˚C, 3˚C and 4˚C) across regions and sectors; and

Assess the impact of different climate-related risks, including:

Advances in energy technology which reduce the need for fossil fuels
Policy action by governments to mitigate climate change, including carbon taxes, energy efficiency regulations and renewables subsidies; and
The physical manifestation of climate change

The analysis provides the key economic indicators that you need to develop ‘climate risk-aware’, sustainable investment portfolios.

If some companies and industries fail to adjust to this new world, they will fail to exist.

Carney and De Galhau, Governors of the Bank of England and France

Systemic Climate Risk Scenario Solution

In partnership with Ortec Finance we offer a service that takes the outcomes for economic indicators under different climate and transition scenarios and translates these into implications for the risks and returns to investment across different asset classes.

The resulting systemic climate risk-aware scenarios provide a unique set of quantified climate-adjusted economic and financial outlooks up to 2060 differentiated by country and global warming pathway.

We need a bold Budget built around a green recovery plan

Posted by: Andrew Sentance

Publish date: 24th February, 2021 | 1:36pm24/2/2021

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Senior Adviser Andrew Sentance calls for a bold Budget that addresses long-term investment in the UK’s green recovery plan and tax reform, ahead of Rishi Sunak’s Budget statement on Wednesday 3 March.
On Wednesday 3 March, the Chancellor of the Exchequer Rishi Sunak will deliver…

Spotlight interview: János Hidi

Posted by: Cambridge Econometrics

Publish date: 10th February, 2021 | 1:37pm10/2/2021

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We recently welcomed Sustainable Investment Manager János Hidi to the Cambridge Econometrics team in Budapest. János will be taking forward our Sustainable Investment service at a critical time for the financial sector managing climate risk and building climate resilience. We …

Investing for sustainable growth

Posted by: Andrew Sentance

Publish date: 20th February, 2020 | 2:12pm20/2/2020

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Andrew Sentance argues that to achieve a net zero economy by 2050 the UK government must invest now.
The economic model that has developed in the UK and other major economies over the past 250 years of industrialisation and economic development is heavily dependent on the burnin…

Sustainable Investment

Quantifying climate-related financial risks

Systemic Climate Risk Scenario Solution

We need a bold Budget built around a green recovery plan

Spotlight interview: János Hidi

Investing for sustainable growth

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