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Climate change: Why are infrastructure investors aware of the risk while failing to measure it? |
A new report states that an overwhelming majority of investors consider, on the one hand, that climate risk will have a highly significant impact on their infrastructure investment. But, on the other hand, they say that a lack of essential data means that global investors do not know how to gauge - or manage - the risk that climate change poses to their portfolios. These results are based on an ambitious survey, which polled 70 investment industry professionals including managers of more than US$2tr of assets. |
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“Dark green” equity funds could go “full green” with very limited impact on their risk profile |
Sustainable investment funds have blown up in size in the last decade. However, many funds that claim to be sustainable still contain stocks of companies involved in greenhouse gas-intensive industries. But, what is the impact of these controversial stocks on the risk profile of these funds? Can the holding of these stocks in sustainable funds be justified? Overall, do climate-related exclusions have an effect on portfolio risk? |
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How companies calculate their carbon footprints |
When it comes to slashing carbon emissions, the onus is often placed on individuals and their carbon footprint. But companies also have a major role to play. In fact, the biggest corporations have accounted for more than two thirds of global emissions since the start of the Industrial Revolution. |
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Why EDHEC Business School is a major player in sustainable finance |
Facing colossal investment needs to address climate change and ensure sustainable and inclusive development of the planet, governments have voiced high expectations for the financial sector. At the same time, an increasing share of the population expects investment decisions to integrate environmental and social dimensions. Progress has been made, yet there is still a long way to go in building sustainable finance. EDHEC Business School has been recognised for over 20 years for its expertise in finance. Our approach to climate finance is founded on a commitment to equipping finance professionals and decision-makers with the insights, tools, and solutions necessary to navigate the challenges and opportunities presented by climate change. |
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Double-materiality serves both investors and civil society |
In an op-ed published by French reference newspaper Le Monde, IFRS Foundation International Sustainability Standards (ISSB) Board Chair Emmanuel Faber represents that the double-materiality approach to sustainability reporting is a simplistic concept whose popularity derives from a “triple illusion.” Interestingly this offensive - simple materiality would be sufficient to finance a just transition - takes place as the first set of European Sustainability Reporting Standards (ESRS), which have double materiality at their heart, are under scrutiny by the European Commission’s co-legislators prior to definitive adoption. Frédéric Ducoulombier, Director of the EDHEC-Risk Climate Impact Institute, reviews the key elements of this debate. |
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Extreme weather could burn many investment portfolios by mid-century |
The study shows that the physical risks created by climate change are not limited to a distant future for investors in infrastructure, some of whom could well lose more than 50% of the value of their portfolio to physical climate risk before 2050 in the event of runaway climate change. Moreover, the average investor will also lose twice as much to extreme weather, mostly in OECD countries, compared to a low carbon scenario. |
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