Existing climate scenarios, inspired by the IPCC framework, provide invaluable insights but were not designed for financial uses.
New research by EDHEC-Risk Climate Impact Institute explores approaches to enrich the existing framework with probabilistic information. This allows finance practitioners to both understand which outcomes are more likely and should therefore attract greater attention; and to get a better appreciation of what lies in the tails of the damage distribution. This has important practical investment implications for portfolio allocation and could also be used to refine valuation models to quantify and manage climate risks at a granular level.
EDHEC-Risk Climate Impact Institute is pleased to invite you to an exclusive webinar: How to Enhance Climate Scenarios for Investors on Thursday 14 March at 2:00pm CET.
At the event, Professor Riccardo Rebonato, Scientific Director and Doctor Dherminder Kainth, Research Director at EDHEC-Risk Climate Impact Institute, will provide insights into their forthcoming white paper titled “Climate Scenario Analysis and Stress Testing for Investors: A Probabilistic Approach", and will answer the audience’s questions.
The seminar will address the following issues:
- Why climate scenarios are important, and why they differ from market-risk scenarios.
- Do current industry scenarios meet the needs of investors?
- Putting uncertainty centre stage: how to create probability distributions of economic damages.
- Giving investors what they need: from probability distributions to probability-aware scenarios.
- Reverse stress testing with climate damages.