Climate Science and Investing

Climate Science and Investing

Climate change is creating complex challenges for the planet and financial markets, and momentum is growing to address these risks through commercial, economic and regulatory action. That’s why AB is partnering with Columbia University’s Climate School.

Collaborating with Columbia's leading climate scientists, we’ve developed programs to educate asset owners and AB investors. And as the founding member of the Corporate Affiliate Program at the Columbia Climate School, we’re bringing together commercial enterprises and Columbia’s pioneering climate and sustainability research.

The goal? To shape the next generation of professionals striving to address the effects of climate change and develop new solutions.

Learn more about how the partnership started and the Corporate Affiliate Program below.

Going to School: Climate Science and Portfolio Risk Training

In 2020, AB equity, fixed-income and multi-asset investment professionals completed the initial Climate Science and Portfolio Risk training—and so did our CEO and members of the AB Board. As part of the process, AB trained Columbia faculty members on how asset managers invest. To date, over 250 AB investors and other employees have completed the 12 hours of course work. 

Three years later, AB and Columbia kicked off the second iteration of the curriculum in 2023 to learn about the latest updates in the physical changes observed in the global climate from the scientific and academic community, and how these are shaping research and forecasts for the global weather phenomena and hydrological cycles that underpin economics, businesses and society. Columbia scientists, meanwhile, learn more about the investment process, helping them deliver more useful information to companies, communities and governments.

Informing Clients: The Client Climate Change and Investment Academy

We’ve always intended for the unique collaboration between AB and Columbia to serve the broader asset management industry, with asset owners and asset managers alike eager to explore the complex risks of climate change and integrate them more effectively in comprehensive investment decision-making.

That’s why AB launched the Climate Science and Portfolio Risk curriculum in 2021 through the Climate Change and Investment Academy, covering topics like: climate science, litigation, policy, solutions, and how integrate climate into the investment process. Throughout 2023, we released the second academy, diving into more topics with our partners at Columbia. More than 1,000 AB clients and other institutions gained access to Columbia’s research and faculty in curated sessions. More details on the Climate Change and Investment Academy 2.0 can be found below.

1. Spotlight on Emerging Economies in the Energy Transition
   As both population sizes and levels of affluence continue to grow across emerging markets (EMs), these economies are poised to see strong future demand growth in energy consumption, which means that EMs could play a major role in the energy transition, with wide-ranging implications for climate, sovereign and corporate credit and geopolitics and energy security.
2. Legacy Energy: Challenges and Opportunities in Decarbonizing China
   China’s decarbonization pathway includes 2030 and 2060 goals, and there is a complex relationship between the country’s traditional energy sources of oil, gas and coal and China’s set objectives of peak carbon emissions by 2030 and carbon neutrality by 2060.
3. Examining Global Food Security through the Climate-Change Lens
   The confluence of geopolitical, climatic, infrastructure and other factors magnify food insecurity, particularly among emerging markets. 
4. Natural Hazards Index: Dimensioning Physical Risks from Climate Change
   The Natural Hazards Index is the latest development in the collaboration between AB and Columbia Climate School, featuring an interactive, publicly available application examining physical climate hazard data in the US. 
5. Evolution of Carbon Markets—Corporate and Investor Perspectives
   As countries and companies continue to explore avenues for achieving their decarbonization strategies, carbon instruments and the markets in which they trade are gaining prominence. 
6. Biodiversity: Exploring Systemic Risks and Investable Opportunities
   Nature loss and concerns around biodiversity are of growing importance for investors, as these present both systemic risks and investable opportunities.

Collaborating on Climate Research

The collaboration between AB investors and Columbia academics on a climate curriculum has spurred ideas for joint climate-change research projects. The two institutions have kicked off a research agenda focusing on the intersection of the academic facets of climate science with AB’s investment processes.

AB investors and Columbia scientists and experts collaborate on climate issues in the investing process across portfolios, sectors, asset classes and regions. We’ embark on long-term, deep research projects exploring climate challenges, including natural hazards and global food security.

By sharing the results of this research through thought leadership, workshops and other avenues, we’ll demonstrate how investors are applying new insights to inform their decisions and stewardship activities.