In recent years, climate change has evolved from an abstract environmental concern to a palpable economic threat. Extreme weather events, rising sea levels, and unpredictable natural disasters are no longer distant possibilities—they are realities that can upend financial markets and devastate investment portfolios. As investors grow increasingly aware of these risks, Environmental, Social, and Governance (ESG) investing has emerged as a powerful tool for managing and mitigating climate-related financial exposure. This article provides an in-depth exploration of the intersection between climate disasters and portfolio risk, explains the fundamentals and evolution of ESG investing, and examines historic examples and strategies for adapting to a changing environment. Introduction Investors have long sought ways to diversify risk and protect their portfolios from market volatility. However, the traditional risk management toolkit has been forced to reckon with a new and pressing thr...
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