
Episode #30
Going deep on physical climate risk
Given the scorching temperatures much of Europe has been facing this summer, it's not surprising that physical climate risk is high on the agenda for many investors. But actually getting to grips with the topic remains an ongoing process. In this episode, we speak to Nicolas Schneider, senior research engineer and macroeconomist at EDHEC Climate Institute. Earlier this year, EDHEC launched EDHEC-CLIRMAP (EDHEC-Climate-Induced Regional Macroimpacts Projector), an interactive tool that helps investors understand how specific regions will be affected economically under various warming scenarios. Find more information on it here . Schneider visited PEI Group's London office during London Climate Action Week in June for a conversation NPM‘s Toby Mitchenall. In addition to discussing CLIRMAP in more detail, Schneider covers a range of issues important for investors, including: Why markets are currently mispricing physical climate risk, and how that risk feeds into asset valuations. The crucial distinction between headline-grabbing acute events and the "elephant in the room" of chronic, compounding climate risk. The scale of projected GDP losses under a 3°C scenario and what it means for large institutional portfolios.

