Few issues are as significant to our environment and society, and
investment returns, as climate change. The challenge it presents is only
becoming more pressing, as the energy transition progresses too slowly
– and the geopolitical environment becomes more complex.
At LGIM, we look at the transition through the lens of scenario analysis.
This helps us to mitigate the associated risks, and capture the
opportunities, on behalf of our clients.
In 2022, we undertook a root-and-branch review of all the assumptions
that underpin the scenarios we model, whose main findings we detail in
this paper. These scenarios are neither forecasts nor predictions; they
are potential pathways we have modelled for the world realising different
climate outcomes.
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