Transitioning from rhetoric to action: Integrating physical climate change and extreme weather risk into institutional investing
This report presents a practical means to factor climate change and extreme weather risk into institutional investing. Climate Risk Matrices (CRM) offer industry-specific standardization and are a practical tool to prioritize the top means by which climate-related events may negatively impact business continuity, while simultaneously identifying actions investors should expect a company to take to mitigate prioritized risks.
Six CRMs are profiled in this report:
- Electricity Transmission & Distribution;
- Commercial Real Estate;
- Banking (Residential Mortgage Providers);
- Property and Casualty Insurance (Personal Home Insurance);
- Hydroelectricity Generation, and;
- Wind Electricity Generation.
This report should catalyze action – and diminish complacency – by the majority of institutional investors who do not factor physical climate risk into portfolio management. This report offers a practical tool (CRMs) that investors can use to assess the exposure of investee companies to extreme weather and what measures need to be put into place to reduce those risks.