More Data, Less Problems: A Case for More Precise Climate Data in Investment Allocation

Document Type

Article

Publication Date

8-13-2020

Keywords

climate change, climate data, financial analytics

Abstract

While some investors may not yet care about climate change, many do. Investors and insurers need accurate information on important measures such as floodplains, fire zones, and deadly pandemics so that they can make informed investment decisions about future events and avoid the worst consequences of climate change on a financial investment. The problem is that investors and insurers do not know how to properly translate climate data into financial analytics. The increasing costs associated with the impacts of climate change are poorly reflected in financial statements and risk management frameworks across the globe. Likewise, future challenges and opportunities associated with climate policy are not fully appreciated.

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