Investing in the Era of Climate Change

Usher (Renewable Energy), a Columbia Business School professor, breaks down the implications of the climate crisis for investors in this urgent call for action. Noting that scientists are pushing for the reduction of emissions from greenhouse gases to zero “ideally by 2050 and no later than 2070,” Usher cites data suggesting the cost of doing so will be $125 trillion. Investing in climate change solutions will therefore be key, he writes. To help readers do so, he explores four trends “influencing the flow of capital,” including physical risks (such as rising seas, drought, and other severe weather), technological innovations (primarily low-carbon ones), evolving social norms (young consumers are interested in sustainable businesses), and government action (namely, voters pushing for regulations). As well, Usher lays out how to “redeploy capital” through divestment, or “refusing to invest in fossil fuel companies”; describes “impact first” investing, or being “willing to accept a below-market financial return in exchange for greater impact”; and takes a look at the cost and history of renewable energy, electric vehicles, and carbon removal. Though his tone at times veers toward the academic, he’s always hopeful: “the window has not yet closed for avoiding catastrophic climate change.” Investors looking to do well by doing good will find this a valuable resource. (Oct.)