CLIMATE CHANGE AS AN INVESTMENT RISK: ASSET OWNERS PERSPECTIVE

A growing evidence suggests that climate change should be viewed as a financial risk that has to be factored into investment decision making. This study has taken a look at how institutional asset owners view their portfolio exposure to climate investment risk. The topical literature and existing to date research was reviewed. The interviews with the representatives of UK's largest institutional asset owners were carried out. The study found that the climate investment risk is largely recognised among institutional asset owners, though levels of recognition vary. Generally, the risk is perceived to be lower and less probable than that projected by researchers. The underlying causes of varying degrees of climate investment risk recognition are found to be in short-termist approach to investment and high reliance on third parties to manage climate investment risk.