Publication: Let’s Get Physical: Comparing Metrics of Physical Climate Risk
Let’s Get Physical: Comparing Metrics of Physical Climate Risk
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Hain, L. I., Kölbel, J., & Leippold, M. (2022). Let’s Get Physical: Comparing Metrics of Physical Climate Risk. Finance Research Letters, 46, 102406. https://doi.org/10.1016/j.frl.2021.102406
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Investors and regulators require reliable estimates of physical climate risks for decision-making. While assessing these risks is challenging, several commercial data providers and academics have started to develop firm-level physical risk scores. We compare six physical risk scores. We find a substantial divergence between these scores, also among those based on similar methodologies. We show how this divergence could cause problems when testing whether financial markets are pricing physical risks. Hence, financial markets may not ad
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Hain, L. I., Kölbel, J., & Leippold, M. (2022). Let’s Get Physical: Comparing Metrics of Physical Climate Risk. Finance Research Letters, 46, 102406. https://doi.org/10.1016/j.frl.2021.102406