This week, Wellington Management, the global investment firm that manages some $1.4 trillion on behalf of pensions, endowments and other institutions, announced along with the Joint Program on the Science and Policy of Global Change at the Massachusetts Institute of Technology that they have formed a climate change research collaboration.
Per a statement from Wellington, the alliance will bolster its current research on the transition to a low-carbon economy, enhance its understanding of the expected financial impacts of various transition pathways on industries and economies, and deepen its decarbonization engagement practices.
The MIT Joint Program’s integrated team of natural and social scientists aims to provide Wellington’s investment teams with comprehensive climate change projections under various environmental, economic, and policy scenarios. The objective of this research is to outline decarbonization pathways for corporate operations, supply chains, and products, while also assessing their potential economic impacts. Wellington’s investment teams plan to integrate these transition-risk findings into their ongoing fundamental research, in conjunction with physical-risk findings from Woodwell Climate Research Center, a leading independent climate-science research thinktank.
Wellington says it has long believed climate change has the potential to significantly impact economic and market outcomes. The firm launched its first climate-focused investment strategy in 2007 and has continued to expand its climate research capabilities. In 2018, Wellington initiated its collaboration with Woodwell to help bridge the gap between climate science and finance. And in December 2020, Wellington became a founding member of the Net Zero Asset Managers initiative, assessing decarbonization pathways on a strategy-by-strategy basis and working with individual clients on their net-zero goals.
“Our collaboration with the MIT Joint Program will focus on cutting-edge transition-risk research outlining the economic risks and opportunities associated with climate change,” said Wellington Climate Research Director Chris Goolgasian. “The pace of change and innovation in this field demands that we collaborate with and learn from leading climate-science experts to further inform investment decisions.”
“We look forward to applying the MIT Joint Program’s capabilities to assess many complex socio-economic relationships and feedbacks, from changes in technology to evolving global and local policy actions,” said Sergey Paltsev, Deputy Director of the MIT Joint Program. “We hope that our collaboration will deepen understanding of potential decarbonization paths and associated global investment implications.”
