Climate change has become a topic investors need to address. A critical mass of regulators requires financial entities to measure and disclose the risks associated with it; a critical mass of investors is examining it, which will price its potential impacts into markets; and a rising number of governments are enacting policies to address it that will shape markets and economies. In this research, we focus on a set of questions about climate change that is especially relevant to us as macroeconomic investors—the impact of climate change on the major economies around the world. There is considerable uncertainty regarding the physical impacts of climate change on economies; as we surveyed expert views on the topic, we found a wide range of plausible outcomes for investors to consider. And while the physical impacts of climate change will take years to play out, the economic and market impacts of policy choices or other human responses to climate change are likely to take place much faster.
