Exposure to carbon emitting companies represents a series of risks for fixed income investors. Regulatory moves and consumer preference for cleaner companies and the physical risks of climate change could damage companies’ earnings power resulting in rising default risk. Moving to a low-carbon emissions economy will require a period of change as the world adapts and creates the systems and technologies to support it.
Why carbon transition?
Source: AXA IM, June 2024. For illustrative purposes only.