Integrating physical climate risks into investment decisions
As the world gathers in Glasgow amid calls to avert climate disaster, the Investor Leadership Network launches a new instrument to help investors understand the impact of climate change-related risks and make better informed decisions
On 3rd November 2021, during the “Finance Day” organized in the framework of the COP26 taking place in Glasgow, the Investor Leadership Network (ILN) launched the new Climate Change Physical Risk Toolkit, offering a set of resources and an approach to help investors address direct and indirect physical risks associated with climate change and to identify more climate resilient assets.
As the frequency and severity of climate change-related weather events are increasing, posing systemic, macroeconomic risks to financial systems, as well as physical risks to assets and operations, the ILN Toolkit was designed to provide investors with guidance on how to make better informed decisions. It helps them understand the potential physical impacts of climate change on investments and the corresponding financial implications, based on the geographies, sectors and value chains associated with each investment.
The ILN Toolkit includes a Disclosure Guide to provide investors with a full picture of a company’s climate change risks for effective investment decision making and to support companies in enhancing their physical risk disclosures for more effective communications with investors. In addition, the ILN has curated a Resource Guide, a selection of reliable sources of external research, databases, documents, disclosure frameworks and regulatory and legislative sources to help investors and other stakeholders in further researching the physical risks and financial impacts of climate change.
Generali is an active member of the Investor Leadership Network, a collaborative platform launched in 2018 under the Canadian presidency of the G7, which brings together leading global investors to accelerate financial industry actions on key sustainability and long-term growth issues, starting with the climate challenge. In fact, Generali is part of the ILN working group which is focused on spreading good practices for the analysis and communication of the financial risks related to climate change as part of the FSB-TCFD (the Task Force on Climate-related Financial Disclosures, created by the Financial Stability Board in 2015).