Schroders Simon Webber warns a failure to reach agreement at the UN climate change conference could impact carbon intensive industries such as steel.
Webber, the Schroder Global Climate Change fund manager, believes the lack of a deal in Copenhagen will lead to "environmental protectionism" to the detriment of heavy industry.
"In regions such as Europe where tough regulation and carbon pricing is already underway, parallel carbon tariffs on imports would likely become a more popular tool to protect domestic industry from unfair competitive disadvantage," he says.
"This environmental protectionism would have many important consequences for investors, particularly in energy intensive industries such as steel and polysilicon, as well as for local alternative energy companies."
However, Webber believes businesses involves in carbon markets - including exchanges and carbon credit producers - will also suffer if Copenhagen fails.
"We remain wary of this group given the huge current uncertainty around carbon markets post 2012," he says.
"This uncertainty is heightened by the apparent growing body of opinion that simple industrial policy will be the key policy tool to build a low carbon economy, not carbon cap and trade regimes."
