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AS DEADLY AS IT HAS BEEN, the coronavirus has given one undeniable (if temporary) gift to the planet: cleaner air. “The global economic shutdowns have sharply reduced the level of global greenhouse gas emissions this year,” says Joe Quinlan, head of CIO Market Strategy, Chief Investment Office for Merrill and Bank of America Private Bank. Levels of fine particulate matter in New York, Delhi, Sao Paulo and other major cities have dropped from 25% to as much as 60%, Quinlan adds.
Near-term threats to climate-change solutions
Yet even as pollution-causing activity has been temporarily curtailed, the pandemic is disrupting efforts to reverse climate change and other environmental threats, according to a new Chief Investment Office report, “The Great Clash: The Crisis Doesn’t Stop Change.” Since the pandemic began, battered oil companies have decreased their low-carbon investments, hygiene concerns have driven a resurgence of single-use plastics, and nearly 600,000 U.S. clean-energy workers have lost their jobs.
“There’s no question the pandemic will cause some delays in environmentally friendly policies,” says Chris Hyzy, Chief Investment Officer for Merrill and Bank of America Private Bank. “But climate change directly endangers the global economy, and mitigating risks remains a key objective of governments and corporations alike,” he adds. “We also see it as an important long-term investment theme.”
Long-term investment themes to consider
Looking beyond the pandemic, investors may find some promising areas to consider, Quinlan says. Despite an expected downturn in 2020, wind and solar energy will likely continue the rapid growth they’ve experienced in recent years, he believes. Other promising areas for the post-coronavirus economy include:
As with any investments, speak with your advisor about whether climate-change-related strategies make sense for your portfolio and long-term goals, Hyzy suggests. Either way, there’s little doubt that the need for solutions will continue to grow long after the coronavirus has gone away.
“This disease, like others, will likely be brought under control,” Quinlan says, “leaving it up to humanity to carry on the fight against climate change.”
Information is as of 06/17/2020
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The Chief Investment Office, which provides investment strategies, due diligence, portfolio construction guidance and wealth management solutions for Global Wealth & Investment Management ("GWIM") clients, is part of the Investment Solutions Group (“ISG”) of GWIM, a division of Bank of America Corporation (“BofA Corp.”).
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