Institutional investors, like all investors, rely on their research and analysis to uncover material information in order to improve investment strategies and attain higher returns. The effects of climate change have already had material effects on macro-economic indicators often used by institutional investors in Asset/Liability Management (ALM) and Strategic Asset Allocation (SAA). Incorporating the effects into investment strategy should therefore be a key component for predicting asset performance as climate impacts become more tangible for investment returns.

This paper, “Scenario Analysis for Systemic Climate Risk” by Ortec Finance and CFA (Climate Finance Advisors), highlights the importance of taking systemic, macroeconomic climate-related risks and opportunities into account when making strategic investment decisions. The paper also explores how investors are able to act on insights gained from such analysis. Four types of institutional investors are examined in this paper, each of which has slightly different ALM and SAA strategies given how they invest, their overall risk appetites, and investment horizons. The Climate & ESG Solutions team at Ortec Finance specializes in integrating climate and sustainability insights into standard investment process modelling and analysis. This enables financial institutions to gain insights into quantified climate & ESG risks and opportunities, using efficient integrated software solutions. All in line with regulatory requirements across our client's strategic investment decision-making process.

To find out more about the solutions click here.


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