👉 Background: IFM Investors is an institutional investment manager. Basically, it invests on behalf of institutions like super funds, sovereign wealth funds and unis. It has around $200 billion under management!

👉 What happened: IFM owns a stake in several Aussie airports, Melbourne’s Southern Cross Station and the Port of Brisbane, just to name a few. Usually this crew keeps things pretty low key, so it was surprising when its CEO piped up with a very public warning.

👉 What else: He reckons if Aussie airports, hospitals, ports and roads don’t find a way to slash carbon emissions, then asset values could collapse by a whopping 40% during the next few decades. And this risk should be taken more seriously, because it’s 'systemic'.

What's the key learning?

💡There are two major types of risk when you’re investing: systematic (or systemic) risk and unsystematic risk. Let’s break it down. Systematic risks are inherent to the market overall. Once it hits, it hits pretty much everyone and there ain’t much you can do to stop it...like the impact of the war in Ukraine.

💡Unsystematic risks are the opposite, ‘cos they affect only a specific group of investments. Think: social media companies being impacted by privacy law changes... Sucks for them, but it's not gonna crash the whole market.

💡Climate change is the epitome of systematic risk, because it's not just affecting one industry, it's affecting everyone. IFM reckons if we don’t reach our climate targets, it could cost pension funds and super funds $US7 TRILLION in losses... Eeeep!