Schroders global investment strategists Tina Fong, environmental economist Samar Khanna, and economist Irene Lauro point out that the changing climate and return forecasts suggest investors need to step up their efforts. Carbon pricing is widely seen as a key policy incentive for transitioning to renewable energy, and the associated costs will bring inflation to decarbonized economies. The impact of climate change will also bring more direct economic costs, such as some fossil fuel reserves being stranded and becoming "stranded assets." Schroders Global Investment states that overall, the impact of climate change on asset returns is uneven, with both winners and losers. Schroders global investment points out that by 2024, real and nominal returns for most asset classes are expected to increase, especially for fixed income assets. To cope with the major transformations in decarbonization, demographics, and deglobalization (referred to as the "3D reset"), and ongoing inflation, policymakers are likely to keep interest rates at higher levels. As cash returns rise, driving up returns for all fixed income assets, the risk premium for holding stocks will decrease. Considering the relative attractiveness of holding cash and sovereign bonds, stock investors may need to work harder to overcome the challenge of investing in stocks. On the other hand, the impact of climate change on asset returns is not uniform, with winners and losers spread across different regions. While emerging markets returns are significantly reduced when climate change impact is taken into account, return expectations are still expected to be higher than most developed markets. Schroders global investment states that with expectations of global central bank policy rate hikes, cash return forecasts are expected to rise, especially for cash returns in developed economies. This is because policymakers will keep interest rates at higher levels to deal with sustained inflation. In the short term, tight labor markets are likely to keep prices and wages high for a long time. In the medium term, inflation may be more persistent than imagined due to the impact of the COVID-19 pandemic and the 3D reset. In comparison, Schroders global investment has slightly lowered its 2024 global stock return forecast, mainly due to weak expected returns in emerging markets and slightly lower expectations for US stock prospects. Additionally, factors related to the decline in emerging market dividend yields are also involved. Overall, it is expected that the risk premium for holding stocks in 2024 has narrowed relative to holding major government bond markets. Therefore, stock investors will need to make more effort. Schroders global investment believes that in the next 30 years, investors (especially emerging markets stock investors) can still earn returns by taking on more risk and investing in stocks. However, the impact of economic decarbonization policies will pose challenges for the stock market, and investors who seize the opportunity early in stock selection are likely to benefit from it. From the perspective of asset classes, the expectation of delayed transition to renewable energy usually means slowing economic growth and declining corporate profits, leading to a decrease in productivity and stock returns. This will offset some of the benefits brought by the rising inflation premium on stock returns, particularly affecting emerging markets stocks, which will also suffer greater potential losses due to stranded assets.