Climate Change Investment Strategy
Climate change is reshaping the investment context. As it introduces new material risks and opportunities for investments, long-term investors like WRI have a fiduciary duty to consider the implications. Given the urgency and magnitude of this challenge, WRI is refining its sustainable investment strategy to include a more targeted and holistic approach to climate change. By strategically managing climate-related risks and opportunities, WRI’s new climate change investment strategy will help the portfolio achieve—if not enhance—competitive risk-adjusted returns, while advancing the transition to a low-carbon, climate-resilient, just economy.
Our Climate-related Goals and Commitments
WRI seeks to align its endowment portfolio with the goals of the Paris Agreement. WRI’s Climate Change Investment Strategy is oriented around two key commitments to help achieve this overarching goal:
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WRI commits to transition its investment portfolio to net-zero GHG emissions by 2050, with aspirations to align investments with a 1.5°C future
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WRI commits to prioritize investments that support the transition to a resilient and just economy.
Climate-change Investment Beliefs
WRI believes:
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Climate change is an urgent threat to humanity. Its impacts bring devastating consequences for human life and pose enormous risks to businesses, financial stability and the global economy at large. These impacts are already playing out and will only worsen with time.
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Given the magnitude of the challenge, government, businesses and investors all need to play a role in confronting climate change. Together, we must work toward aligning economic activities with the Paris Agreement goals. Achieving these goals requires reaching net-zero global emissions by mid-century (IPCC, 2018) and centering our approach around justice and resilience.
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As we shift towards a low-carbon, climate resilient, just economy, sustainability is becoming an important driver of economic growth. As a long-term investor, strategically managing climate-related issues not only aligns with our mission and values, but can help mitigate investment risks and deliver superior returns over time.
Our full set of beliefs are available in our statement.
A Science-based Approach
To track progress towards our goal of alignment with the Paris Agreement, WRI will set specific and measurable five-year targets. In establishing the targets, WRI will draw from the best available scientific knowledge and climate justice frameworks, including the findings of the Intergovernmental Panel on Climate Change (IPCC), methodologies from the Science Based Targets Initiative (SBTi) and the Just Transition Principles.
The targets for the net-zero commitment will incorporate interim science- based targets that put our portfolio on a 1.5°C decarbonization pathway.
Achieving Net-Zero Emissions and Advancing a Resilient, Just Transition
WRI’s climate change investment strategy is organized around five key objectives. The objectives are designed to steer the investment portfolio toward the overarching goal of Paris Alignment, while maintaining competitive risk-adjusted returns. Each objective is paired with a set of specific timebound activities and targets (when applicable) to help guide implementation. WRI will pursue the multiple objectives simultaneously.
The specific strategy to achieve our overarching climate goal and commitments may continuously evolve, particularly as our own knowledge and investment options evolve. Additional information about WRI’s climate investment strategy is available on our website.