Sustainable Investing

Climate change

Climate change means the changes seen in weather patterns due to the heating of the Earth’s atmosphere.

The long-term burning of fossil fuels since the industrial revolution of the 18th century has led to the gradual accumulation of greenhouse gas that become trapped in the atmosphere. Research suggests that the Earth has already heated up by around 1 degree Celsius since the 1780s and continues to do so.

Many new forms of more extreme weather pose a threat to many forms of life on the planet. The principal effect of a warmer atmosphere is to create more moisture, leading to heavier and more unpredictable rainfall, causing floods and increasingly destructive storms. It has also led to more extreme summer temperatures, causing droughts and forest fires, and the growing ‘desertification’ of formerly fertile areas. Ten of the world’s hottest years in recorded history have occurred since 2005, while the amount of CO2 in the atmosphere is now at its highest level for three million years.

Aside from more extreme weather, climate change threatens agricultural production, as milder winters and earlier springs interrupt crop-growing patterns. Higher temperatures have a double whammy effect on insects. In warmer areas, they threaten to wipe out the ‘friendly’ insect population on which plants rely for pollination. In colder areas, warming threatens to expose countries to the ‘unfriendly’ disease-bearing insects that they currently avoid.

Polar regions are heating faster than more temperate areas due to the ‘ice-albedo feedback’, where land laid bare by melting ice absorbs more sunlight, causing more heating, which causes more melting. Thawing permafrost in the northern regions of Canada and Russia poses a separate threat, in that they act as giant stores of captured greenhouse gases. These gases would be released on melting, accelerating climate change further. Trees also act as a carbon sink, which means deforestation adds to global warming, accounting for about 11% of emissions, according to the World Resource Institute.

Read more: Engagement and biodiversity lead 2022 Global Climate Survey


Research showing that 90% of greenhouses gases have been absorbed by the ocean has greatly increased its acidity, leading to the death of coral and other marine life. The extinction of coral reefs and many fragile ecosystems has already been noted in areas such as Australia, which suffered record bush fires due to extreme temperatures in its summer of 2020, and has lost up to 90% of the Great Barrier Reef.

Figure 1: Annual Arctic Sea Ice Minimum Area

Figure 1: Annual Arctic Sea Ice Minimum Area

Source: NASA

Meanwhile, warmer oceans are gradually eating away at coastal glaciers, melting them even further. The total effect of melting glacial ice in the Arctic and Antarctic is to raise sea levels, estimated to have caused almost 2 cm of sea level rise since 1980. The International Panel on Climate Change (IPCC) warned in 2019 that left unchecked, global warming will raise sea levels by about 1.1 meters by 2100, threatening many coastal cities.

See also:

Global warming Paris Agreement Greenhouse gas emissions | GHG emissions

Let's keep the conversation going

Keep track of fast-moving events in sustainable and quantitative investing, trends and credits with our newsletters.

Stay updated
Robeco

Robeco aims to enable its clients to achieve their financial and sustainability goals by providing superior investment returns and solutions.

Important information This disclaimer applies to any documents and the verbal or written comments of any person in presentations or webinars on this website and taken together is referred to herein as the “Information”. The services to which the Information relate are NOT FOR RETAIL CLIENTS - The information contained in the Website is solely intended for professional investors, defined as investors which (1) qualify as professional clients within the meaning of the Markets in Financial Instruments Directive (MiFID), (2) have requested to be treated as professional clients within the meaning of the MiFID or (3) are authorized to receive such information under any other applicable laws and must not be relied or acted upon by any other persons. This Information does not constitute an offer to sell, or a solicitation of an offer to buy, any financial product, and may not be relied upon in connection with the purchase or sale of any financial product. You are cautioned against using this Information as the basis for making a decision to purchase any financial product. To the extent that you rely on the Information in connection with any investment decision, you do so at your own risk. The Information does not purport to be complete on any topic addressed. The Information may contain data or analysis prepared by third parties and no representation or warranty about the accuracy of such data or analysis is provided.

In all cases where historical performance is presented, please note that past performance is not a reliable indicator of future results and should not be relied upon as the basis for making an investment decision. Investors may not get back the amount originally invested. Neither Robeco Institutional Asset Management B.V. nor any of its affiliates guarantees the performance or the future returns of any investments. If the currency in which the past performance is displayed differs from the currency of the country in which you reside, then you should be aware that due to exchange rate fluctuations the performance shown may increase or decrease if converted into your local currency. Robeco Institutional Asset Management B.V. (“Robeco”) expressly prohibits any redistribution of the Information without the prior written consent of Robeco. The Information is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use is contrary to law, rule or regulation. Certain information contained in the Information includes calculations or figures that have been prepared internally and have not been audited or verified by a third party. Use of different methods for preparing, calculating or presenting information may lead to different results. Robeco Institutional Asset Management B.V. is authorised as a manager of UCITS and AIFs by the Netherlands Authority for the Financial Markets and subject to limited regulation in the UK by the Financial Conduct Authority. Details about the extent of our regulation by the Financial Conduct Authority are available from us on request.