15 Mar 2022

'En-flation': The heightened risk of inflation in increasingly environmentally conscious economies

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by Seema Shah, Managing Director, Chief Strategist

As surging inflation data continues to hit the headlines, a lot of ink has been spilled about the contribution of "greenflation"—the extent to which energy transition efforts have created a chain reaction resulting in higher energy prices and, ultimately, higher consumer costs.

However, the inflationary contribution of net zero initiatives from businesses and governments is wider ranging than rising energy prices. The rapidly changing way that companies across all sectors factor environmental considerations into their business models—and the rising costs of doing so—are potentially still being underappreciated by some investors.

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