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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.

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…

Climate change and financial risk: how economic models can help

Posted by: Sophie Heald

Publish date: 20th February, 2020 | 9:00am20/2/2020

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In a series of speeches for the Bank of England, Mark Carney warned firms and investors that they must adapt to climate risks.
Sophie Heald, our Sustainable Investment lead, explains how models can be used to help quantify these risks.
The last decade was the warmest ever. In r…

Estimating the global value of stranded fossil fuel assets

Posted by: Hector Pollitt

Publish date: 25th June, 2018 | 3:46pm25/6/2018

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the global value of stranded fossil fuel assetsassets

The momentum behind technological change in the global power and transportation sectors is overwhelming.
Our analysis, published in Nature Climate Change, suggests that between $1tn and $4tn could be wiped off the value of global fossil fuel assets by 2035.

This dramatic dec…

Sustainable Investment

Quantifying climate-related financial risks

Systemic Climate Risk Scenario Solution

Investing for sustainable growth

Climate change and financial risk: how economic models can help

Estimating the global value of stranded fossil fuel assets

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