Your property is worth $0: Welcome to climate change

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Say you own a $5 million waterfront home in a prime spot of a booming city. Life’s pretty good right - what could possibly impact the value of your house to any significant extent? Ronald Temple of Lazard Asset Management says real estate – along with other financial assets – are all exposed to climate change risks. For example, a 4C surge in temperature will sink 200km of coastline and trillions of dollars’ worth of property in Florida. But it isn’t after the fact that those property values will be affected.

“If this is going to happen in 20 years, do you now start to value the property at 50% or 75% less of what it was? And what does that mean for the mortgage you borrowed, and what does that mean for the mortgage-backed securities that were issued with that loan inside them?”

Here Ron expands on how climate risk is interconnected with financial markets and highlights the need for investors to consider environmental, social and governance factors into investing.

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