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Vivid Economics is a strategic economics consultancy spanning public policy and support for commercial decision making with a broad, international focus
The Inevitable Policy Response (IPR) is a landmark project to prepare financial markets for a wave of policy action as governments worldwide are forced to address climate change. Government action to tackle climate change has yet to achieve a fundamental economic shift, but as the realities of climate impacts become increasingly visible, governments will be forced to act more decisively. Yet, financial markets are not adequately pricing in climate-related policy risk.
Today we’re launching new analysis that shows in detail how the inevitable policy response to climate change will cause re-pricing of many the world’s most valuable companies by 2025. This forecast is based on company level impacts and shows major winners and losers emerging between and within key sectors including energy, automobiles, utilities, minerals, and agriculture.
- Find more details of the results and the full report: Forecast Policy Scenario: Equity Markets Impacts
- Sign up to our webinar on the key impacts and what’s driving them: The Inevitable Policy Response: Preparing investors for an abrupt transition (11th December, 14:00 GMT)
Our aim is to deliver a reality-check to investors who assume governments will take limited action on climate change, while also providing them with a tool to navigate the complex and evolving policy landscape. We hope this will encourage investors to engage in forward looking risk management – shifting from brown to green asset allocations while advocating and engaging for earlier and more ambitious climate action.
This forecast tool responds to fresh concerns that financial markets are overly reliant on business-as-usual outlooks – such as the International Energy Agency’s Stated Policy Scenario (STEPS) – that assume a limited policy response to climate change. Up to now, a major problem for investors has been a lack of a credible forward-looking alternative for business planning. We hope to fill that gap.
A forceful policy response to climate change within the near term is not priced into today’s markets. Yet it is inevitable that governments will be forced to act more decisively than they have so far, leaving investor portfolios exposed to significant risk. The longer the delay, the more disorderly, disruptive and abrupt the policy will inevitably be. In anticipation, PRI, Vivid Economics and ETA have developed a pioneering project that helps investors prepare for the financial impact of an Inevitable Policy Response (IPR). Join to find out about the macro-economic impacts, which key sectors will be impacted across major asset classes, to learn about the Forecast Policy Scenario (FPS)l and how PRI will support investors. Speakers include: Thomas Kansy (Principal, Vivid Economics) and Sagarika Chatterjee (Director of Climate Change, PRI)
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