Up to $2.3trn of company valuation could be lost by 2025 as policymakers around the world take steps to deal with the climate transition, according to the latest analysis by the Principles for Responsible Investment (PRI).
Working with Vivid Economics and Energy Transition Advisors on the latest phase of its Inevitable Policy Response (IPR) project, the PRI warns that between 3.1% and 4.5%, or $1.6trn-$2.3trn, is permanently at stake for companies in the MSCI All Countries World Index (ACWI) – one of the world’s most used benchmarks. The study analyses the iShares MSCI ACWI ETF from BlackRock, which tracks the index.
Around 30 analysts have spent the last six months creating sector- and company - level climate forecasts based on eight ‘policy levers’ that are likely to be employed by governments to rein in climate change over coming years. The levers include carbon prices, coal bans and support for renewable energy.
The analysts bought …