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Climate – Asset Management

Perhaps in part a result of client demands, a large and growing segment of the investment community recognizes the opportunities and risks attributed to ongoing biodiversity loss and climate change.  Within capitalist societies, capital allocation serves as a primary catalyst with respect to the magnitude, composition and direction of economic growth.  Unified asset managers, in other words, maintain significant power to influence climate disclosure reporting and organizational behavior. The incentive to do so is very well described by Sir Partha Dasgupta in Section 1.6 of The Economics of Biodiversity: The Dasgupta Review

"In a widely cited publication in Science, authors estimated that the global flow of the biosphere's services was, toward the end of the 20th century, worth US$16-54 trillion annually, with an average figure of US$33 trillion (Costanza et al 1997).  As that figure was larger than global Gross National Product (GNP) in the mid-1990s (estimated by the authors at the time to be approximately US$18 trillion annually) we were meant to appreciate the economic significance of the biosphere."

"The estimate is a case of misplaced quantification.  If the biosphere was to be destroyed, life would cease to exist.  Who would then be here to receive US$33 trillion of annual benefits if humanity were to exchange its very existence for them?"