A Climate Transition Forecasting Consortium: Understanding the IPR and Its Implications for Investors

Climate change is a pressing issue that requires urgent action from governments and investors alike. The Inevitable Policy Response (IPR) is a consortium that aims to forecast the acceleration of policy responses to climate change and prepare institutional investors for the risks and opportunities associated with this transition.

Led by Vivid Economics and Energy Transition Advisors, the IPR Climate Transition Forecasting Consortium includes Research Partners and Strategic Partners to provide a comprehensive analysis of the impacts of policy acceleration on the energy system, food & land use system, and the real economy.

The Forecast Policy Scenario (FPS) developed by IPR outlines the major climate policies likely to be implemented in the 2020s and quantifies their impact on various sectors. This scenario serves as a tool for investors to assess the implications of policy acceleration on their portfolios and identify opportunities for value enhancement.

Despite the forecasted acceleration in policy responses, the FPS may not be enough to limit global temperature increase to 1.5 degrees Celsius. To address this gap, IPR has developed the 1.5C Required Policy Scenario (RPS) which outlines more ambitious policies needed to achieve the 1.5C target.

Investors are encouraged to use the IPR Investor Value Drivers Database to incorporate climate scenarios into their investment strategies and mitigate financial risks associated with an accelerated policy response. The PRI recommends specific actions for investors to protect and enhance the value of their portfolios in the face of climate transition.

Overall, the IPR consortium provides valuable insights and tools for investors to navigate the complex policy and regulatory landscape related to climate change and align their investment strategies with the transition to a low-carbon economy.