Much has been written about the threat of climate destabilization and investors are more and more aware that there are distinct challenges between posed to their own portfolios. Whether it’s rising sea levels, intolerable summer temperatures, frequent extreme weather (droughts, super-sized hurricanes, flooding, blizzards) or assertive government regulators, it is clear that these things are going to impact our portfolios.

But how? What, other than moving to Minnesota (or investing in Mairs & Power, which is located in Minnesota and is famous for investing in Minnesotans), should we do?

In March, our Investor’s Guide to the End of the World tried to offer a clear, non-polemical guide to the most authoritative evidence we could find. We concluded that you had three fundamental portfolio strategies: divest (buy fossil-free funds), invest (in ESG-screened funds) or innovate (by investing in funds that target highly resilient, adaptive firms). In April, we offered specific recommendations and a profile of the fund I’ve added to my own portfolio, Brown Advisory Sustainable Growth.

In the past month, three major financial players have issued specific advice for climate-aware investors. Here’s a quick snapshot of their reports.

GMO, Thinking Outside the Box: How and Why to Invest in a Climate Change Strategy (April 2019). GMO argues that some fairly conventional investments, value stocks as an example, have useful buffering tendencies so that not all climate-aware investing comes down to “buy solar” or some such. Their key points:

• We believe the secular growth tailwinds in the climate change sector will provide investors with strong investment opportunities for decades to come.
• In our opinion, a well-designed climate change strategy can provide investors with a variety of benefits, including diversification, protection from climate risk, inflation protection, and the ability to invest in growth-oriented companies at a discount.
• For those considering fossil fuel divestment, clean energy solutions provide indirect exposure to fossil fuel prices.
• A climate change strategy can play an important role in a global equity program, real asset program, ESG portfolio, or as climate risk insurance.

BlackRock, Getting Physical: Scenario Analysis for Assessing Climate-Related Risks (April 2019). BlackRock, which manages $6 trillion in assets, focuses on the immediate risks to three different, popular asset classes and makes recommendations for how to assess the risks in your portfolio. Their key findings:

• We show how physical climate risks vary greatly by region, drawing on the latest granular climate modeling and big data techniques.
• Extreme weather events pose growing risks for the creditworthiness of state and local issuers in the $3.8 trillion U.S. municipal bond market. We translate physical climate changes into implications for local GDP — and show a rising share of muni bond issuance over time will likely come from regions facing economic losses from climate change and events linked to it.
• Hurricane-force winds and flooding are key risks to commercial real estate. Our analysis of recent hurricanes hitting Houston and Miami finds that roughly 80% of commercial properties tied to affected CMBS loans lay outside official flood zones — meaning they may lack insurance coverage. This makes it critical to analyze climate-related risks on a local level.
• Aging infrastructure leaves the U.S. electric utility sector exposed to climate shocks such as hurricanes and wildfires. We assess the exposure to climate risk of 269 publicly listed U.S. utilities based on the physical location of their plants, property and equipment. Conclusion: The risks are underpriced.

Morningstar, Morningstar Sustainability Atlas (April 2019). Morningstar has a substantial amount of new research on sustainable investments and investors. This particular report identifies the regions where international investors are likely to find the greatest prospect for good corporate governance and practices. Their key takeways:

• Northern Europe leads the way when it comes to corporate-level sustainability. Denmark scores highest on social criteria, the Netherlands on governance. Portugal has the best Environmental Score.
• Colombia is the world’s highest-scoring non-European market for sustainability because of companies like Bancolombia, Ecopetrol, and Cementos Argos (a global ESG leader in its industry). However, the Colombian market also shows great risk from the transition to a low-carbon economy.
• China finds itself at the bottom of the rankings across the three ESG criteria. The main issue here is poor corporate governance, with companies like Alibaba and Tencent underperforming their peers.
• Switzerland scores very well on ESG criteria (ranking third out of 46), but the number of controversies involving key companies such as Novartis and Nestlé lower its overall Sustainability Score.
• The United States, for its part, ranks in the fourth quintile of global sustainability leaders because of a significant level of controversy from big index constituents like Amazon, Apple, and Microsoft, and poor Governance Scores from companies like Facebook and Alphabet. On the other hand, the U.S. is the only non-European country to rank in the best quintile for carbon risk.
• Brazil, an upper middle-quintile performer on ESG criteria, ultimately placed in the bottom half for overall Sustainability Score, owing to controversies from some of the country’s largest companies, like Vale S.A. and Petróleo Brasileiro.
• Asian markets Japan and Korea score poorly on corporate governance. SoftBank Group, Toyota, and Samsung underperform from this point of view.

The link above takes you to a “fill out this form for a free download” page. If you’re loath to sign up, Morningstar’s blog shares at least a little more detail without commitment.