Climatic Tipping Point – Why Investors Should Care
GEDB toghether with the United Nations’s Principles for Responsible Investment (PRI) published a case study report tackling the latest scientific work on the Earth’s climate tipping points and its potential impact on the global economy. Climatic tipping points are critical thresholds that determine how the Earth’s system functions and the Amazon rainforest is changing rapidly due to anthropogenic deforestation. This work has an aim to promote understanding among investors about land use change and its importance for the stability of the planetary climatic system.
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The increased uncertainty and economic costs related to climatic tipping points with the Amazon rainforest as an example in this report, will have significant detrimental impacts on economies and societies globally. Awakening of the tipping points due to climate change and environmental degradation pose a systematic risk to investors’ portfolios. Therefore, institutional investors should be aware of the risks posed by climatic tipping points, especially when screening for climate-related risks in their portfolios. Institutional investors can tackle deforestation and prevent dangerous climatic tipping points by actively engaging the companies they invest in and which are operating in important ecosystems, such as Amazon.