Climate change presents unprecedented challenges to investors, policy makers and regulators. Adaptation, avoidance and remedial action all require knowledge of what may lay ahead of us, but unfortunately, with climate change we cannot say that “we have been here before”. This is why climate scenario analysis (and its cousin, stress testing) must play a particularly important role in guiding our responses to climate change. As we explore this unchartered territory, we are faced with greater challenges than traditional financial stress testing presents because we have much less data to draw on and shaky models linking temperature increases to economic damage. Yet, despite these difficulties, we are forced to also do something we usually dispense with when handling macrofinancial scenarios: we must assign at least order-of-magnitude probabilities to the various climate occurrences.

In this interview, Felix Goltz, Research Director at Scientific Beta, discusses the integration of ESG in factor investing, the pivotal role of academic research and the important insights gained over the years, the strategic shifts in research themes to meet investors' evolving needs, the rationale behind Scientific Beta's climate index series, and the Scientific Beta and EDHEC-Risk Climate Impact Institute research chair established recently to further research into climate risk modelling.

This result attests to EDHEC’s overall excellence and the appeal of its full range of programmes. EDHEC especially stands out in terms of ESG criteria, placing the ecological transition and the fight against climate change at the heart of its teaching and research strategy.

This month, EDHEC Business School professors explore the critical role of the financial sector in essential transitions within economies and societies. But why is it a two-way street? What role are researchers – and in particular those at EDHEC – already playing? What would a genuine #sustainablefinance look like, and why are education, research, and collaboration the pillars of it?

EDHEC Business School will host a GRASFI PhD workshop on April 2 & 3, 2024. Collaborating with Université Paris-Dauphine, HEC Liège, and Maastricht University, this workshop offers a platform for PhD candidates to present their research work on sustainable finance including climate finance, asset pricing, impact investing, ESG Investing, non-financial reporting, and engage in scholarly discussions. Submissions are welcome until February 23.

We are delighted to announce that EDHEC Professor Gianfranco Gianfrate’s academic research paper "Determinants of Internal Carbon Pricing," published in Energy Policy, has been Highly Commended in the FT Responsible Business Education Awards, in the category “Best business school academic research”.

The French Association of Institutional Investors (Af2i) unveiled the winner and runners-up of its yearly Academic Prize for excellence in applied investment research. "Climate Output at Risk" by EDHEC-Risk Climate Impact Institute Professor Riccardo Rebonato, Dr. Dherminder Kainth, and Dr. Lionel Melin, was amongst three articles shortlisted by the association's research commission.

During the webinar, with over 600 professionals registered from 60 countries, EDHEC-Risk Climate Scientific Director reviewed the merits of various market efficiency explanations for the elusive sensitivity of asset prices to climate risk and explored why current market prices may be underestimating the effects of climate risk on government revenues and the cashflows of companies.

In this 30-min conversation hosted by Christian Doherty (The Actuary), climate experts Riccardo Rebonato and Nick Jessop, Head of Scenario Modelling Research, Insurance and Pension at Moody’s Analytics, engage in a thought-provoking discussion, exploring how standard climate scenarios can be used to create short-term stresses for financial markets and broaden the scope of climate analysis.

As we enter a new year, EDHEC-Risk Climate Impact Institute takes a look back at the most read articles in 2023, covering a diverse range of topics that are at the heart of its expertise (climate change, climate risks, scenarios analysis, double materiality, sustainability reporting, ESRS, SFDR, carbon pricing and ESG).