Tighter government climate regulations by 2025 could wipe up to $2.3 trillion off the value of companies in industries ranging from fossil fuel producers to agriculture and car makers, an investor group warned in a report.
Rules aimed at lowering carbon emissions are expected to accelerate in the coming years as countries scramble to meet obligations under the 2015 Paris climate agreement limiting global warming.
Any abrupt policy shifts risk severely disrupting current investment strategies, UN-backed Principles of Responsible Investing (PRI), a group representing investors with $86 trillion of assets under management, said in a report.
“As the realities of climate change catch up, social pressure mounts, and low-carbon solutions get cheaper, it’s highly improbable that governments will be allowed to let the world sleepwalk into greater rises in temperature without being compelled into forceful action sooner,” PRI Chief Executive Fiona Reynolds said.
“This poses huge threats for assets and for the wider system.”