Global commitment to mitigate climate change yields opportunities – Franklin Templeton

Templeton Global Equity Group suggest there are substantial opportunities in companies deemed undervalued that can also have a meaningful impact on climate change mitigation and adaptation.

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... As markets approach 2023, the global economic and geopolitical outlook remains highly uncertain. However, the commitment to decarbonisation efforts is robust and the outlook for renewable energy remains bright. According to Merrill Lynch, net-zero emission targets were in place in countries accounting for 91% of global gross domestic product (GDP) as of June 2022 (versus 16% of GDP in 2019).

A notable development in Europe was that, in spite of higher economic growth compared to the prior period a year ago, the region’s emissions declined between August and October of 2022. This is a promising development, showing that the recent efforts to decarbonise may be bearing fruit as well as confounding the idea that economic growth and emissions reductions are mutually exclusive. Political developments were also positive, including the passage of the Inflation Reduction Act in the United States and the election of Luiz Inácio Lula da Silva (Lula) in Brazil. Lula ran on a platform of halting deforestation and generally
undoing policies linked to environmental degradation in
the country.

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