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Widening wealth inequality is the defining challenge of our time. Studies of rampant wealth inequality have associated it with slowing growth, declining macroeconomic fundamentals, eroded social cohesion and increased political polarization. The uncertainty surrounding geopolitical and socioeconomic futures in countries across the globe has made an understanding of systemic inequality and its potential effects on investments and the economy all the more relevant.
The Covid-19 pandemic has precipitated a deep and lasting economic crisis, adding to the on-going aftershocks of the 2008 financial crisis. Whilst the challenge is immense, any long-term recovery strategy must be premised upon working towards a more inclusive and sustainable economy, with greater resilience for the future. Within this context, it is widely understood that governments will have to accept a more active role in the economy...
The ravages of COVID-19 and climate change should make clear that government alone cannot protect us from existential risks.  Sustainable investors and the private sector need to leverage their capacity for innovation, vast resources, and influence in an effort to prevent nuclear conflict. Even a single detonation could shock global capital markets and economies, our jobs and way of life and, ultimately, our personal health.In addition to detailing the risks of nuclear conflict and its potential impact on markets and economies, this new report lays out:A range of screens that ESG investors should use when assessing how target investments might be contributing to nuclear weapons risks. It should be more than a question of divestment or not, and a range of industries need to be considered when looking at the nuclear supply chain and the possibility of conflict.Impact investments that can and should be made to lessen the risk of nuclear conflict.
Climate-related financial risks might have the potential to trigger the next systemic financial crisis, as recently stated by the Bank of International Settlements. In consequence, understanding these so-called Green Swan risks should be a key priority in financial decision-making and supervision. However, a systematic approach and a comprehensive theory on climate-adjusted financial risk metrics is still missing. This study is a first step to fill this gap, with a focus on transition risks.
This report provides quantitative evidence on the relevance of climate-related risks for banks and investors in Latin America.
Nature is declining at an unprecedented rate, with nearly 1 million species at risk of extinction because of human activity. Earth system scientists have warned that the Amazon rainforest, the world’s coral reefs and the boreal forest biomes are all fast approaching the cusp of irreversible tipping points with far-reaching effects on the economy, society and life as we know it. The consequences are just as alarming for business and humanity as they are for the environment. The first report of the World Economic Forum’s New Nature Economy Report (NNER) series, Nature Risk Rising, highlighted that $44 trillion of economic value generation – over half the world’s total GDP – is potentially at risk as a result of the dependence of business on nature and its services.
Climate transition benchmarks have become a focal point for investors looking to integrate climate risks into their portfolios and align them with the climate goals of the Paris Agreement.Investors and regulators are actively looking to identify SI criteria that can be used to define such benchmarks. Accordingly, the EU Technical Expert Group developed recommendations for minimum benchmark requirements that are aligned with the Paris goals and considered the risk of greenwashing.This research paper looks at: Addressing the EU’s action plan on sustainable investmentDeveloping a FTSE All-World Paris-aligned Benchmark (PAB) IndexDemonstrating the FTSE All-World PAB Index performanceAchieving the climate transition objectives with FTSE Russell’s Target Exposure framework
This investor brief summarizes environmental, social, and governance risks at Grupo México, the third largest copper mining company in the world. Grupo México’s wholly-owned subsidiary ASARCO operates copper mines, a smelter, a refinery and processing plants in the United States. Approximately 1,700 workers in Arizona and Texas walked off the job in October 2019 to protest the company’s serious unfair labor practices1 after management demanded significant increases to healthcare costs and refused to raise wages, which would remain stagnant for 14 years under the company’s contract proposal.2 The strike has gained investor attention and crippled the company’s Hayden smelter and Amarillo refinery operations
Biodiversity underpins all economic activities through the provision of a range of ecosystem services, and it is experiencing dangerous and unprecedented declines due to the current model of economic development. The world’s ecosystems have declined in size and condition by 47% globally compared to estimated baselines, and the continued degradation of ecosystem services represents an annual loss of at least US$479 billion per year. With recent estimates stating that more than half of the world’s total Gross Domestic Product is moderately or highly dependent on ecosystem services, these declines in biodiversity are a signal that action needs to be taken to strengthen the global economy’s resilience.
The energy transition is disrupting the entire fossil fuel system, with profound consequences for financial markets and geopolitics.
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