How should family offices invest in impact? An investment strategy for environmental risk
As the world needs to make significant progress to limit global heating, the role of private investors is coming under increasing scrutiny. We evaluate the investment strategies for economic growth through climate adaptation.
should family offices invest in impact

What you need to know

  • To contribute meaningfully towards reducing climate change, radical efforts need to be made.
  • Building climate change into investment models, aligning durable growth with sustainability goals and developing strategies to close the climate adaptation finance gap are just some of the approaches here.
Impact Updated on January 16, 2024

The world needs to make significant progress to limit global heating. In fact, a recent UN report found “no credible pathway to 1.5°C in place” as stipulated in the Paris Agreement. Volatile macroeconomic conditions have investors, business leaders, governments, and central banks actively managing crises on multiple fronts – and these efforts can also be applied to how family offices invest in impact. In Europe, one of these is the military front of Russia’s war against Ukraine which precipitated the greatest instability in European energy supplies in decades. Fortunately, there is opportunity in these difficult times. According to IEA analysis, “for the first time, global demand for each of the fossil fuels shows a peak or plateau across all WEO scenarios, with Russian exports, in particular, falling significantly as the world energy order is reshaped.” The policy packages shaping this outcome are a combination of long-term planning, forecasting, and short-term reactions.

Public and private sector climate efforts including regulation, new reporting requirements, and financing solutions are all part of the broad-based efforts advancing around the world. Demand for stronger reporting requirements is evidenced by the over ninety per cent of institutional investor respondents to a recent survey who believe that climate risk is not adequately priced into global financial assets.

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Simple solutions for complex times.