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Climate change will be a defining issue of the 21st century, affecting societies, economies, and markets. At Bridgewater, our starting point for addressing climate change is who we are—investors with a fundamental, systematic, and diversified approach to understanding the world and translating that understanding into insights and portfolio solutions to help our clients achieve their financial and sustainability goals. This makes climate a crucial ingredient for Bridgewater’s central mission. Our CEO and Executive Committee have made sustainable investing, with climate a central component, a strategic priority across the company, and climate-related considerations are integrated across our business: in our portfolio solutions for clients with sustainability goals, in how we seek to beat markets in our alpha portfolios, in our portfolio risk controls process, in our approach to stewardship, in our suite of tools for partnering with clients and analyzing their portfolios, and in our reporting.

The secular investment landscape looks more like decades past than the last 20 years: the interest rate lever is back in play, inflation matters again, acute deleveraging is behind us, and the government is playing a more active economic role—all amid geopolitical tensions. At the same time, dynamics like AI and climate change are likely to shape the world in unprecedented ways.

Maximizing the benefits of geographic diversification can be highly beneficial for portfolios. But doing so can be difficult because many economies are closely linked to US conditions, making their markets highly correlated to US assets investors already own. In this report, we walk through some of the markets we see as most diversifying.

Achieving the world’s ambitious climate goals will require rapidly scaling economically viable technologies, while also innovating, incentivizing, and investing in less mature technologies that are not yet cost-competitive.

Co-Chief Investment Officer Karen Karniol-Tambour has been recognized among 100 women at the highest levels of leadership in US Finance.