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Dilemma on Wall Street: short-term gain or climate benefit?

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By illuminem briefings

· 1 min read

illuminem summarizes for you the essential news of the day. Read the full piece on The New York Times or enjoy below:

🗞️ Driving the news: Portfolio managers face conflicting incentives between short-term profits and long-term climate benefits
• Recent analysis shows the social cost of carbon is higher than previously thought, yet Wall Street is retreating from climate goals, with investments in fossil fuels still prevalent

🔭 The context: Despite commitments from financial institutions to reduce emissions, many are pulling back due to high interest rates, supply chain issues, and geopolitical factors
• The short-term gains from fossil fuel investments continue to attract firms despite the long-term climate risks

🌍 Why it matters for the planet: Financial institutions' reluctance to fully commit to decarbonization hampers global efforts to combat climate change, increasing the potential for severe environmental and economic impacts in the future

⏭️ What's next: The outcome of the U.S. election could significantly influence climate policies and financial strategies
• Regulatory frameworks in Europe and certain U.S. states may push for stricter climate-related financial disclosures and penalties for polluters

💬 One quote: “You’re going to be disadvantaged in the market if you’re left holding a big bag of carbon 10 years from now” — John Morton, Pollination Group

Click for more news covering the latest on sustainable finance

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