Financiers should look beyond profit/loss to help save the planet - Federated Hermes

Political leaders weren’t the only ones at the COP26 climate summit in Glasgow in November...

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... The international business of Federated Hermes hosted the two-day Further, Faster conference to discuss how the world community should tackle the climate crisis and steer organisation to a more sustainable future. During the event, experts explained the vital role of the financial sector in that process. 

Investors have long had a single focus: a searing eye on the bottom-line profit or loss in pounds and pence. Now, experts say change is needed in the financial sector if the world is to successfully tackle climate goals, experts told attendees.

That change could include financiers valuing public companies using new-fangled metrics.

The incentive problem is a weird thing. Currently, companies can make a profit and good returns for their investors even if they contribute harm to the globe. They may be doing that by emitting excessive levels of greenhouse gas that may one day put us all at risk. Historically, that has not mattered much to investors because such environmental costs, no matter how real, were not mentioned on the financial accounts.

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