Global Views

Pimco's Thoughts on Global Macro

February 2019


In this article

Climate change and ESG risks are often evaluated in respect to the impact they might have on asset valuations. Joachim Fels, PIMCO’s economic advisor, looks at it from a different angle, namely what impact climate change could have on government processes and especially the conduct of monetary policy.

He mentions a speech from ECB Director Benoit Cœuré, who highlights the difficulties climate change creates for central banks. Cœuré’s reasons apply equally to conducting investment and asset manager research. Climate change creates more noise for investors, more idiosyncratic events affecting performance and individual events having a more material impact. All factors which can make it potentially more difficult to assess and compare investment returns going forward.

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