30 November 2015

EF BRIEFS: Goldman Sachs, Moody's, Oxford SSEE

Goldman: green too big to ignore

Green investment opportunities have become "too big to ignore", according to a report by Goldman Sachs.

The Low Carbon Economy GS SUSTAIN equity investor's guide to a low carbon world, 2015-25, says that "leaving the low-carbon economy to sector specialists is increasingly risky".

"Investors need to understand the competitive threats that the low-carbon economy creates for incumbents, but we also see attractive long-term investment opportunities," the authors say, pointing to companies exposed to wind, solar and LED lighting – particularly those that are somewhat protected from regulatory risks, through geographical diversity.

Goldman Sachs has given 'buy' status to stocks such as US solar firm Solar Edge, Danish wind turbine manufacturer Vestas, and LED producer Acuity Brands, as part of the report.

Moody's: Environmental risk to have 'material' impact on 11 sectors

11 industry sectors, with a combined debt of $2 trillion, are set to be materially impacted by environmental risks over the next five years, according to a report by Moody's.


The ratings agency measured the environmental risk of 89 sectors and found the most exposed sectors are unregulated power generation, coal mining and coal terminals. Companies involved with car making, mining, steel, commodity chemicals, building materials and independent oil and gas explorers could also face a material credit risk in the next three to five years.

The two sectors with the lowest exposure are the media and telecommunications.

Research launched into companies' climate change legal liability

A research initiative into the legal liability risks faced by company directors and pension trustees has been launched by the Oxford University Smith School of Enterprise and the Environment (SSEE).

The research will look at the legal basis for directors and trustees from the UK, Canada, Australia and South Africa to take account of physical climate change risks and societal climate change risk.

"Company directors could be at risk of litigation if they mislead investors and the public about climate change," said Ben Caldecott, programme director at SSEE. "They may also face litigation for having contributed to anthropogenic climate change. This is a very new area, but one with potentially significant consequences. This new initiative will help investors to assess the materiality of these potential liabilities and inform best practice across Commonwealth common law countries."