Climate Change

How climate scenarios can help investors build portfolio resilience

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Investors must recognize the material impact of climate change on investment portfolios. Image: Unsplash/Marcus Winkler

Rachel Teo
Head of Sustainability & Total Portfolio Sustainable Investing, GIC
De Rui Wong
Lead, Sustainable Investment Research, GIC
Trang Chu Minh
Vice President, Sustainability Office, GIC
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Overview of GIC climate scenarios
Overview of GIC climate scenarios. Image: GIC
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Figure 2: Physical vs transition risk impacts in GIC’s climate scenario sets
Physical vs transition risk impacts in GIC’s climate scenario sets. Image: GIC
Figure 3: ClimateMAPS tool: Process for translating climate scenarios into portfolio impacts
ClimateMAPS tool: Process for translating climate scenarios into portfolio impacts. Image: GIC

Figure 4: Overview of the GIC Climate Signpost indicators
Overview of the GIC Climate Signpost indicators.
Figure 5: Climate scenario probabilities in 2019 vs 2022
Climate scenario probabilities in 2019 vs 2022. Image: GIC

Figure 6: Volatility in both GDP growth and inflation, especially for DDT and TLTL
Volatility in both GDP growth and inflation, especially for Delayed Disorderly Transition and Too Little Too Late scenarios. Image: GIC
Figure 7a: 40-year annualised absolute returns Figure 7b: 40-year cumulative returns shown (USD, nominal) as a difference from baseline (USD, nominal)
Graphs showing annualized and cumulative returns under the different scenarios. Image: GIC
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