Asset owners are inherently long-term investors, often looking decades ahead to ensure sustained returns. The stability and viability of the ecosystems and communities in which they invest are crucial to their long-term success. The impact of climate events poses a risk – as well as opportunity - that investors may need to identify and manage to protect and grow their assets for the future beneficiaries of these funds.

Environmental markets play a crucial role in climate risk management, offering mechanisms to price pollution and a venue to manage that risk. By using these markets, asset owners can assign a financial value to climate risk and align their portfolios with the transition towards a lower-carbon economy.

By doing this, asset owners are providing price signals which assign a cost to pollution which helps incentivize capital to be allocated towards more sustainable technologies, such as carbon free electricity and investment in carbon sequestration and storage. This helps create a cycle where industries and services which use less carbon are valued by the market at a higher price than those who use more carbon or pollute more.