A fresh look at creating carbon smart portfolios
With the backdrop of 2015 marking the planet’s hottest year since temperatures were first recorded in 1880*, the ‘Paris Agreement’ from the Conference of Parties (COP) 21 produced a global climate change treaty under international law. The agreement states that global greenhouse gas emissions should peak ‘as soon as possible’ to keep global temperature increase to 1.5 – 2°C above pre-industrial levels. The temperature recorded for 2015 already saw a 0.9°C increase.
BNP Paribas is working with Avalerion Capital to develop a new climate change stress-testing approach that moves beyond assessing absolute carbon emissions as the principal risk factor.
Three fundamental questions lie at the heart of our stress-testing work:
*National Oceanic and Atmospheric Administration (NOAA) – State of Climate Reports Year 2015