While the environmental threats posed by climate change have long been understood, it is becoming increasingly clear that there will also be significant economic impacts to consider, which up until now have not been getting a lot of attention from investors.  In the coming years, I expect that these issues will become more obvious and that investors will need to take steps to ensure the long term health of their portfolios.

In his annual letter to CEOs, Larry Fink, the Chairman and CEO of the world's largest asset manager BlackRock, forecasts that climate change will lead to a "fundamental reshaping of finance."  In light of the changes that BlackRock foresees, Fink outlines the climate change driven risks that companies will face in the coming years.  As the fund manager for $7 trillion there is a lot of attention paid to what BlackRock says, and to me the key message from the letter is Fink's statement that "We believe that sustainable investing is the strongest foundation for client portfolios going forward."  

While Fink's letter is short on specific actions, it does highlight the fact that these issues are beginning to move from the background of investment decisions to a more prominent position.  This is a trend that I believe will accelerate in the coming years, and as with any disruptive change it will offer both risks and opportunities to investors. 

I hope you'll have a few minutes to read though Fink's letter, and if you have any questions please give me a call or send me an email. 

Take Care,

Mike