Addressing climate change can help add alpha and manage risk

The longer your investment time horizon, the greater the risk that climate change can harm your portfolio.

If companies didn’t care about climate change, what sort of world would we live in? And, how profitable would those investments be?
Addressing climate change is critical in our efforts to adding alpha and reducing risk in every asset class that takes the long view.
It’s hard to imagine what America would be like today if we all had not aggressively stepped up in the 1970s to address issues of public safety, social injustice and air and water pollution. In similar fashion now, climate change has arisen as a leading health and economic challenge of our time. For investors, climate change poses a range of risks, spanning asset classes and geographies, and intensifying the timeless tension between the desire for short-term gains and the responsibility to preserve long-term value. At Nuveen, we continue to give voice to the long-term perspective, not at the expense of near-term performance, but as an added emphasis on preparing carefully for tomorrow’s performance in tomorrow’s world.
In our view, addressing climate change risk is critical to adding alpha, while reducing risks and avoiding catastrophes — in every asset class that adopts a long-term view. In the following pages, four Nuveen investment executives share their views on climate change risk.
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