Importance of Climate Risks for Institutional Investors | The Review of Financial Studies | Oxford Academic

Philipp Krueger, Zacharias Sautner, Laura T Starks The Review of Financial Studies, Volume 33, Issue 3, March 2020, Pages 1067–1111, https://doi.org/10.1093/rfs/hhz137

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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