The Importance of Climate Risks for Institutional Investors
83 Pages Posted: 27 Aug 2018 Last revised: 11 Mar 2020
Date Written: November 11, 2019
According to our survey about climate risk perceptions, institutional investors believe climate risks have financial implications for their portfolio firms and that these risks, particularly regulatory risks, already have begun to materialize. Many of the investors, especially the long-term, larger, and ESG-oriented ones, consider risk management and engagement, rather than divestment, to be the better approach for addressing climate risks. Although surveyed investors believe that some equity valuations do not fully reflect climate risks, their perceived overvaluations are not large.
Keywords: Climate Risks, ESG, Institutional Investors
JEL Classification: G11, G3, Q54
Suggested Citation: Suggested Citation