Climate scenarios
"The scenarios let us imagine radically different futures. It’s how we check for plausibility and don’t shy away from complexity."
Caroline Cook, Head of Climate Change
Watch the video to hear from Caroline how we navigate uncertainty.
Three plausible pathways
The Climate Scenarios Project challenges our investment teams to explore varied but plausible futures and consider how portfolio companies and potential holdings would fare. To do so, they consider narratives based on three different transition pathways:
Orderly transition
The world’s average surface temperature rises by no more than 1.5C over pre-industrial levels. As a result, both physical and transition risks are relatively subdued.
Disorderly transition
The temperature gain is closer to 2C. When the system is finally ‘shocked’ towards a successful transition, it is rushed and requires radical change and strong innovation.
Hot house world
Humanity fails to keep the temperature gain below 2C, and by 2100 it has surpassed 2.5C. Extreme weather events are more frequent, geopolitical hostility rises and inequality grows. Investments focus on adaptation, especially in agriculture and healthcare.
Reporting
What does the future entail? By researching plausible scenarios in our Climate Scenarios Project, we are attuned to how the climate and energy transitions might shape investment outcomes.
Introducing the scenarios and narratives
Storytelling is a key tool for anticipating future investment risks and opportunities.
Discover the stories we’ve written to unlock the future investment landscape.
Macro indicators and market outcomes
Successful investors anticipate and respond to the complexities thrown up by the climate and energy transitions.
Explore the project’s four scenarios, complete with shocks and what to watch for.
Insights
Important information
The content of this website is intended exclusively for professional investors in accordance with MiFID legislation. 'Professional investors' are potential investors who are deemed to have the status of “professional clients”, within the meaning of MiFID (2004/39/EC), as transposed in Ireland. It is not intended for retail investors.
Baillie Gifford Investment Management (Europe) Limited is authorised and regulated by the Central Bank of Ireland (Reference number C182354) as an Alternative Investment Fund Manager and UCITS Manager to Baillie Gifford Worldwide Funds plc. Its registered office is 4/5 School House Lane East, Dublin 2, D02 N279, Ireland.
This website is informative only and the information provided should not be considered as investment or other advice or a recommendation to buy, sell or hold a particular investment. Read our Legal and regulatory information for further details.
Invest, responsibly
We think companies that act sustainably and treat society fairly have better growth prospects. Additionally, we believe there can be great growth opportunities when firms innovate to meet society’s needs. Find out more about how we consider environmental, social and governance matters and the resulting conversations we have with the businesses we invest in.