Assessing climate risk for investment portfolios

Assessing climate risk for investment portfolios

This report’s key aim is to provide an overview of available approaches to assess the degree of climate risk in investment portfolios, with a particular emphasis on pension funds. I discuss the key methods underlying a number of the most prominent approaches used by the financial industry, by policy institutions, and in the academic literature, and reflect on their main advantages and disadvantages. I also touch upon the relevant regulation for Dutch pension funds, the various data sources available to support climate risk assessments, as well as potential approaches to mitigate climate risk in investment portfolios. Download the full paper.