The water crisis in Cape Town, South Africa, demonstrates that carbon emissions and climate change are not the only sustainability threats, says Monika Freyman, CFA. Water concerns already affect investors' bottom lines as well as future risks to their top lines.
The environment's margin of safety is narrowing with each uptick in global temperatures. This will translate into greater effects on investor portfolios. It is the job of the investment manager to cushion against those risks while still seeking profitable opportunities.