The Flying Dutchman : A changing climate for Asian equities

This past fortnight, climate change stands central. 196 delegations gathered in Paris to finalise a climate agreement aimed at limiting global warming to well below 2°C and to pursue efforts to limit it to 1.5°C.

Dec 15, 2015 02:12 IST India Infoline News Service

A changing climate for Asian equities
196 delegations gathered in Paris to finalise a climate agreement aimed at limiting warming to well below 2°C
We look at which equities across Asian equities could be impacted, by looking at broader trends on a sector-by-sector basis
Climate change is not just about investing in renewable industries, also consider developers of new batteries, fertilizer companies or auto makers across the region
Climate central
This past fortnight, climate change stands central. 196 delegations gathered in Paris to finalise a climate agreement aimed at limiting global warming to well below 2°C and to pursue efforts to limit it to 1.5°C.
The Paris Agreement requires all countries to regularly publish plans to deal with climate change. Other details of how global warming is supposed to be limited are outlined in a report by our Climate Change Centre of Excellence (COP 21: Paris Agreement, 14 December 2015.
Key considerations for many industries are initially focused around the monitoring of, accounting for, and reduction of, greenhouse gas emissions. In general investors should think about the growing advantage of investing in companies that have a proven low carbon footprint.
This note is an attempt to link some of the observations made by our Climate Change Centre of Excellence to Asian equities in general, by looking at the broader trends on a sector-by-sector basis. It is not to identify clear-cut investment opportunities, rather it is to highlight that the climate change initiatives will impact a broad set of Asia corporates in the coming years.
Renewable energy is an obvious beneficiary of a low carbon energy supply chain. However, in this note we also think about other companies - those that make testing equipment for new batteries, develop electric systems for autos, and are involved in new technologies that improve agricultural yields and land usage or fertilizers.
Source: HSBC Global Research

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