Climate Science and Investing

Integrating Climate Science and Investing

Climate change is creating complex challenges for the planet and financial markets, and momentum is growing to address these issues through commercial, economic and regulatory action. That’s why AB is partnering with Columbia University’s Earth Institute, home of the world-renowned Lamont-Doherty Earth Observatory.

Collaborating with Columbia's leading climate scientists, we’ve developed programs to educate AB investors and asset owners. And as the founding member of the Corporate Affiliate Program at the newly launched 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 impact of climate change and develop new solutions.

How the Partnership Started

In 2017, we started a conversation with leading scientists at Columbia University’s Earth Institute to help our investment teams better integrate climate change into our investment process, ultimately improving outcomes for clients.

Our dialogue produced a pilot climate-risk training program in February 2019 for select AB investment professionals across asset classes. The program, later formalized as the Climate Science and Portfolio Risk curriculum, addresses: the science of climate change; its policy, legal and regulatory aspects; solutions; and tools for translating climate science into financial impact.

Based on the pilot’s resounding success and complementary opportunities for joint research, we began a deeper collaboration with the Earth Institute, announced in September 2019 and managed by our Director of Environmental Research and Engagement.

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.

We’ve worked with AB’s Learning and Development Team to enhance the partnership and help advance our success in this vitally important arena by offering this training to all AB colleagues through a virtual Climate Science Library.  To date, over 250 AB investors and other employees have completed the 12 hours of course work. 

Through the program, AB investors gain better insights into the science behind a changing climate and what it means for security issuers, portfolios and the broader economy. 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 issues 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. More than 1,000 AB clients and other institutions gained access to Columbia’s research and faculty in curated sessions. Prerecorded webinars were followed by virtual group Q&A sessions for audiences across the world.  Click below to learn more about the course offerings and topics:

During these in-depth dialogues, participants and panel experts discussed diverse topics, from the impact of rising sea levels on coastal development to the relationship between climate change and social inequality and the effectiveness of carbon capture and storage in reducing global emissions.

Founding the Corporate Affiliate Program at the Columbia Climate School

In the first half of 2021, AB launched another phase in the collaboration between climate science and investment science. We became the founding member of the Corporate Affiliate Program at the newly launched Columbia Climate School. It’s the world’s first school built to focus exclusively on climate change and its challenges—with an emphasis on solutions.

AB’s commitment to the Climate School marks a new paradigm in the approach of financial-services firms to addressing climate change. For Columbia, partnering with a commercial business is recognition that the size, scope and challenge of climate change require a new approach in academia, leveraging the role of businesses and capital markets.

As the program’s founding member, AB will bring together commercial enterprises and Columbia’s pioneering climate and sustainability research. By integrating the unique perspectives and skills of investors and scientists, AB and Columbia seek to shape the next generation of professionals striving to manage climate risk and develop solutions.

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. As part of an exclusive agreement, 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 will collaborate on climate issues in the investing process across portfolios, sectors, asset classes and regions. We’ll also embark on long-term, deep research projects exploring climate challenges, including the approach to net zero and the impact of stakeholders on achieving that target in the next 30 years.

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.