Discover the latest EDHEC Climate Institute Research Insights (IPE Supplement, Spring 2025)
Discover the first EDHEC Climate Institute edition of the "Research Insights" supplement in cooperation with Investment & Pensions Europe (IPE). It explores critical themes at the intersection of finance and climate risk.
Climate Risk and Investors: Advancing Physical Risk Modelling, Climate Data, and Transition Technologies
The EDHEC Climate Institute (ECI) is pleased to share its first edition of the "Research Insights" supplement in cooperation with Investment & Pensions Europe (IPE).
This issue reflects EDHEC’s ongoing commitment to tackling the pressing challenges of climate change through interdisciplinary research, building on its historical expertise in climate finance while integrating new complementary fields to deliver actionable insights for institutional investors:
IPE EDHEC Climate Institute special issue, Research Insights Supplement Spring 2025
An editorial and 5 papers
This supplement explores critical themes at the intersection of finance and climate risk, including:
Introduction to this supplement
By Anthony Schrapffer, EDHEC Climate Institute Scientific Director
The EDHEC Climate Institute follows the long-standing research tradition of EDHEC Business School and represents a collective effort to address the pressing challenges of climate change by promoting interdisciplinary research with a more integrated vision, drawing on historical expertise in climate finance while leveraging new complementary fields to produce concrete insights and applications...
Climate Shocks or the Death by a Thousand Cuts? The Effect of Climate Change on the Valuation of Equity Assets
By Riccardo Rebonato, EDHEC Professor, EDHEC Climate Institute Senior Advisor
While climate finance often emphasises transition risk, recent research highlights the underestimated impact of physical climate risk. Our study explores how extreme weather events and physical damage scenarios affect equity valuations under different policy and climate trajectories, revealing potential mispricing and the need for improved risk integration.
Why We Need Climate Scenario Probabilities and How to Get Them
By Riccardo Rebonato, EDHEC Professor, EDHEC Climate Institute Senior Advisor
Traditional climate risk assessments often treat transition and physical risks separately, overlooking their probabilistic interplay. We introduce a methodology to assign probabilities to emission abatement pathways, factoring in technological, fiscal, and policy feasibility. Our research highlights the low likelihood of meeting the Paris Agreement target and the need for better policy alignment.
From Global Averages to Local Insights: Harnessing High-Resolution Data for Climate Risk Assessment and Resilience to Physical Shocks
By Nicolas Schneider, EDHEC Climate Institute Senior Research Engineer – Macroeconomist
Climate change impacts are highly localised, yet financial models often rely on global averages that obscure sector- and region-specific risks. We explore how high-resolution climate data can enhance risk assessments by pinpointing geo-sectorial vulnerabilities, enabling investors, businesses, and cities to develop targeted adaptation strategies.
Technological Solutions to Mitigate Transition and Physical Risks – Introducing the infraTech 2050 Database
By Conor Hubert, ECI Sustainability Research Engineer - Rob Arnold, ECI Sustainability Research Director and Nishtha Manocha, ECI Senior Research Engineer
Net-zero pledges remain abstract without a clear understanding of the technological pathways for decarbonisation and resilience. The InfraTech 2050 initiative provides a systematic evaluation of technologies and strategies for decarbonising and strengthening resilience of 101 infrastructure asset subclasses with granular information. We illustrate this approach with a concrete example on data infrastructure, a critical backbone for modern economies.
Charting a Pathway for Transition Finance – Lessons from the EU Framework
By Frédéric Ducoulombier, EDHEC Climate Institute Research Programme Director
Effective regulatory frameworks are essential to mobilising transition finance for decarbonisation. We examine its role in the EU Sustainable Finance Framework, highlighting gaps and flaws that hinder investment. Drawing on industry best practices and recent regulatory developments, we propose key areas for reforms to better integrate transition finance into climate policy.
The EDHEC Climate Institute team would like to extend warm thanks to Investment & Pensions Europe for their collaboration on the supplement.
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