Is Your Portfolio Ready for the #ClimateCrisis?

Your Future: Sustainable Financial and Investment Planning Series – Your 401k and other stock market investment (indeed all your assets) are threatend by both radical and incremental risks posed by the #ClimateCrisis. 

The good news for those of us lucky enough to have money in stock is that the markets have never been higher.

The bad news is that the #ClimateCrisis has exposed the global economy to the greatest amount of unknown investment risks ever seen in the history of modern economics.

There is so much we don’t know about how the economy will look in the future. 

But one thing we can say with certainty, either through incremental adaptation to climate change or something more radical, the economy of 10 to 15 years from now will look nothing like that of today.

Climate change exposes investors to record levels of unknown, undefinable risk

Even for those risk we can identify, it is difficult to nearly impossible to define their shape, size, and probable outcomes.

Take permafrost melt. Despite their best efforts, some scientists think we have dramatically underestimated the effect of melting permafrost and release of methane by a factor of six or seven. Impacts on agriculture, energy, and other industries, positive and negative are untold.

This has shaken even the most radical climate change economic impact models.

Will the #ClimateCrisis spur systemic economic collapse?

The long and the short: there are more unknown risks in the economy than we can count.

I’m not saying all your assets including your investment portfolio could be devalued overnight as they were in the great stock market crashes of the 1930s and 2008.

But at the same time, one ignores the potential for radical #ClimateCrisis economic impacts to their own peril.

Not business as usual: Investment professionals are just waking to the #Climate Crisis

How likely is a climate spurred economic collapse?

We just dont know and anybody that gives you a definitive answer is likely making things up or is just guessing.

What I would say is that a systemic collapse is possible and does keep me up at night on occassion. But in reality, we just don’t know when or how such event might occur, if ever.

Climate presents investment opportunity too

What we can say with certainty is that the #ClimateCrisis, biodiversity, an expanding and resource hungry global population, and increasing inequality alone or in combination, represent massive threats to all investors, the middle-class in particular.

They also create similarly impressive opportunities in energy, food, water, transportation and more.

Smart investors will have to be defensive and selectively aggressive as we learn more about how the world will adapt to the #ClimateCrisis.

Watch for more in the Your Future: Sustainable Financial and Investment Planning series. Coming up next week, How to Choose a #ClimateCrisis Woke Investment Advisor

Free Webinar on Selecting Your Sustainability Investment Advisor

If you would like to learn more about how to protect your investments in the #ClimateCrisis, join us in a free webinar on How to Select Your Sustainability Investment Advisor, coming this December. To pre register either subscribe to our newsletter or write us at info@esglobal.com

Invest Like You Give a Damn – Choosing a Financial Planner

Get a head start on the free How to Select Your Sustainability Investment Advisor webinar by getting my book Invest Like You Give a Damn which has a bonus chapter: Choosing a Financial Planner.

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