Financial decisions worldwide are increasingly influenced by the scarcity of resources, and the physical and transitions risks associated with climate. The extent of the environmental impact from climate change is still uncertain but the recent scientific evidence is increasingly worrisome and many governments are taking decisive steps in order to avert a catastrophe.
The transition towards a low-carbon economy requires a broad array of financial instruments and innovations that will have far-reaching implications for markets, corporations, intermediaries, and investors. Given the widespread recognition of climate change risks as perhaps the most fundamental long-term risks for asset managers and asset owners, EDHEC-Risk Institute is committed to launching a number of research and outreach initiatives to help explore a number of issues of strategic importance in climate change finance.
During this one-day conference, which shall combine academic lectures and panel discussions, our experts will discuss several issues of increasing importance. These topics shall include the efficiency of the market pricing of climatic risks, the climate risks assessment and disclosure for corporations and their impact on credit analysis, the financial management decisions affected by climate risks and policies, the design of investment strategies to hedge climate risks and liabilities, as well as the impact of green quantitative easing policies by central banks.
Format: 2-days events
1st day for scholars: December 16
Laurent Calvet (EDHEC Business School) Raman Uppal (EDHEC Business School) Gianfranco Gianfrate (EDHEC Business School) – managing guest editor
Full paper submissions for the conference (only in English): from July 1 to August 31, 2019. Please send your working paper to the following email: [email protected] with the subject heading “Conference on Climate Change Finance”.
2nd day for asset managers, asset owners, policymakers, press: December 17
Leading experts will be featured at the conference, including, Lionel Martellini (Director of EDHEC-Risk Institute), Gianfranco Gianfrate (Professor of Finance, EDHEC Business School), Riccardo Rebonato (Professor of Finance, EDHEC Business School), Harrison Hong (John R. Eckel, Jr. Professor of Financial Economics, Columbia University), Frédéric Ducoulombier (ESG Director, Scientific Beta), Abraham Lioui (Professor of Finance, EDHEC Business School) and professional experts from the industry.
- Morning sessions: Investing in climate risk
Introductory speech: The Landscape of Climate Finance
Lionel Martellini, Professor of Finance, EDHEC Business School, and Director, EDHEC-Risk Institute
• Physical versus transition risks – The science, engineering, economics and finance of climate change
• Green investing versus investing in green – Taxonomy of climate finance from an asset owner perspective
• Doing well versus doing good – Existence of a climate risk premium in public equity and bond markets
Keynote Address: The Sustainable Investing Proposition
Harrison Hong, John R. Eckel, Jr. Professor of Financial Economics, Columbia University
Plenary session: Which Safe Asset for Climate Risk?
Abraham Lioui, Professor of Finance, EDHEC Business School
• If climate related negative shocks have real effects, we may observe a flight to safety
• During hurricane periods, Gold stocks uniquely experience positive abnormal performance
• The safe asset convenience yield of Gold stocks, while substantial, is short lived
Plenary session: Incorporating Climate Risk in Equity Factor Investing Strategies
Frédéric Ducoulombier, ESG Director, Scientific Beta
• Relevance of various metrics in relation to investor objectives; effects of leverage, derivatives and short sales
• Benefits of screening vs. optimisation approaches
• Performance of equity factor strategies with reduced exposure to transition risks
Plenary Panel: Approaching Climate Risk From an Asset Owner Perspective
Dealing with climate change and facilitating the transition towards a low-carbon economy, requires a broad array of new financial instruments and innovations that will have far-reaching implications for investors, so as to ensure that long-term capital is committed to address long-term environmental needs. In this panel discussion we explore how both the transition risks (policy, technology, and behavioral changes) and physical impacts of climate change pose risks and opportunities to the investments that may affect institutional investors’ ability to earn the returns required to provide their beneficiaries with adequate levels of funding.
Andreas Stang, Head of ESG, PFA AM
Olivier Rousseau, Executive Director at Fonds de Réserve pour les Retraites – FRR (The French Pension Reserve Fund)
Jaap van Dam, Managing Director Investment Strategy, PGGM
Norway SWF (tbc)
Moderator: Frédéric Samama, Head of Responsible Investing, Amundi
- Afternoon sessions: Measuring and managing climate risk
Plenary session: Impact of Climate Risk in Credit Analysis
Gianfranco Gianfrate, Professor of Finance, EDHEC Business School
As climate change and global warming are addressed by tougher regulation, new emerging technologies, and shifts in consumer behaviors, global investors are increasingly treating climate risks as a key aspect when pricing financial assets and deciding the allocation of their investment portfolios. In this session we discuss to what extent exposure to climate risks, including carbon pricing risk, affects the level of corporate credit risk. We will also debate what metrics and techniques are available to investors and lenders to assess the implication of climate exposure of corporates.
Plenary session: Advances in Climate Risk Stress Testing
Riccardo Rebonato, Professor of Finance, EDHEC Business School
• Integrated climate change assessments: their promises and their limitations
• The importance of feedback mechanisms: risk or uncertainty?
• Tools to explore non-base scenarios: Bayesian nets
• What this implies for climate change economics and finance
Plenary panel: Measuring and Managing Climate Risks
With raising concerns about global warming, central banks and financial regulators around the world have started questioning to what extent climate change is posing systemic financial risks and whether the mandate of central banks should, in fact, include climate change mitigation. There are proposals for central banks to embed climate-related criteria when assessing whether financial assets are eligible for purchase within their daily portfolio management. Such green monetary policy would aim at steering or tilting the allocation of assets and collateral towards low carbon sectors. The panel will discuss the possible implications of green monetary policies for companies and financial markets.
Charlotte Gardes, Deputy Head of Unit, Sustainable Finance & ESG reporting, French Treasury
Laurent Chatelin, Managing Director, Marguerite Fund
Giorgio Baldassarri, Head of the Analytic Development Group, S&P
Ivan Odonnat, Deputy General Director – Financial Stability and Operations, Banque de France
Moderator: Jean-Michel Beacco, CEO, Louis Bachelier Institute
Sponsorship & speaking opportunities:
Maud Gauchon Marketing & Communication Manager
[email protected] Tel.: +33 493 187 887
To register, please fill in the form
To register, please visit https://www.regonline.co.uk/EDHECclimatefinance2019 before December 11, 2019.
Registration fee: €150 (special rate at €105 for endorsing partner members, EDHEC Alumni). Early bird rate at €125. Free for asset owners.
The registration fee includes a buffet lunch, refreshments and conference documentation. Delegates may be refused admission if payment is not received prior to the conference. Accommodation is not included.