Climate Finance
What is the impact of the evolving landscape of climate finance on global markets and their transformation❓
On November 12, 2024, EDHEC Business School hosted Marcin Kacperczyk from Imperial College, who presented his pioneering research on Net-Zero Portfolios (NZP). Professor Kacperczyk discussed how these portfolios, designed to reach zero carbon exposure by a target date, are aligning investor incentives with climate goals and impacting the transition strategies of carbon-intensive companies.
A key focus of this session was his introduction of the “distance-to-exit” (DTE) metric—a novel, forward-looking tool that estimates the years until a firm might be excluded from NZP. With findings that firms with a longer DTE have higher valuations but lower expected returns, this metric offers a valuable perspective on carbon-transition risk.
Moderated by Riccardo Rebonato, Scientific Director of EDHEC-Risk Climate Institute and Professor of Finance at EDHEC Business School and Alexandre Martin, student in the MSC in Climate Change and Sustainable Finance at EDHEC Business School, this session provided insights into innovative climate finance metrics and their influence on asset valuation.
About EDHEC
Operating from campuses in Lille, Nice, Paris, London and Singapore, EDHEC is one of the world’s top 15 business schools. Fully international and directly connected to the business world, EDHEC commands a strong reputation for research excellence and the ability to train entrepreneurs and managers capable of breaking new ground. EDHEC functions as a genuine laboratory of ideas and produces innovative solutions valued by businesses. The School’s teaching is inspired by its research work and a focus on “learning by doing”, all with the aim of equipping people with the skills to succeed in business.
