Paris climate deal boosts ESG

Paris COP21The recent Paris Climate Summit reassured investors that environmental and social governance (ESG) issues will be implemented, says BMO Global Asset Management.

Nearly 200 countries signed up to reduce greenhouse gas emissions at the UN summit.

BMO Global AM says: “The Paris Agreement makes climate change, and the energy transition, a mainstream investor issue. The focus now shifts to implementation.”

The firm expects regulators’ attention on climate change to increase, both as a result of the deal itself and in the broader context of a trend towards encouraging investors to consider ESG issues.

The summit did not contain any surprises, BMO Global AM says, that would have an immediate impact on company or portfolio valuations, with all the country-level policy announcements having been made well in advance.

Next year may see a scaling up of actions by financial regulators on climate change, with potential consequences for investors, the asset managers says, adding that the ‘Paris Agreement’ commits governments to making financial flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development.

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