Investors have come to terms with the reality that climate change is no longer a theoretical threat. The effects of extreme weather, rising sea levels, resource scarcity and pollution are rippling across every continent with dire consequences for individuals, governments and businesses.
Yet, for many investors, climate investing is still an abstract concept that is often lumped in with discussions of risk management, consumer preferences, the conflation of Environmental, Social and Governance (ESG) with impact investing. In fact, the implications of climate change are nuanced—and so are the potential solutions. By looking at the issue of climate change through a broader lens, we believe investors can be better positioned to identify opportunities that meaningfully address a range of climate issues and potentially deliver compelling risk-adjusted returns.
Here are six of the most common myths percolating around climate investing.
Vikram Raju is Head of Impact Investing AIP Private Markets