The Importance of Climate Risks for Institutional Investors

The Importance of Climate Risks for Institutional Investors

Philipp Krueger, Zacharias Sautner, Laura Starks

Series number :

Serial Number: 
610/2019

Date posted :

July 05 2019

Last revised :

November 09 2019
SSRN Share

Keywords

  • Climate Risks • 
  • ESG • 
  • institutional investors

According to our survey about climate risk perceptions, institutional investors believe climate risks have financial implications for their portfolio firms and that these risks, particularly regulatory risks, already have begun to materialize.

Many of the investors, especially the long-term, larger, and ESG-oriented ones, consider risk management and engagement, rather than divestment, to be the better approach for addressing climate risks. Although surveyed investors believe that some equity valuations do not fully reflect climate risks, their perceived overvaluations are not large.

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Authors

Professor
Real name:
Laura Starks
Research Member
McCombs School of Business, University of Texas at Austin