Latest Publication

Computing Extreme Climate Value for Infrastructure Investments: Asset Pricing Applied to NGFS Phase 4 and Oxford Economics Scenarios

Jan-2024

This paper describes the novel method that we have developed to measure climate risks. While we here apply this method to infrastructure assets, it paves the way to using similar approaches to enlarge the scope of its application. . . . Read More

Climate Risks & Infrastructure Research

Climate risk is pivotal for infrastructure investors due to its profound potential impact on asset viability and financial returns. Rising temperatures, extreme weather events, and regulatory shifts pose significant threats to infrastructure assets, like roads, bridges, and utilities, which are vulnerable to damage, operational disruptions, and decreased demand amid climate-related challenges.

Investors must integrate climate risk assessments into their decision-making processes to mitigate potential losses, ensure long-term resilience, and seize opportunities in the transition to a low-carbon economy, safeguarding investments and aligning with sustainability objectives.Our research focuses on estimating the exposure of infrastructure assets to climate risks (carbon emissions and physical risks) as well as the valuation of these risks in different climate scenarios and the estimation of “extreme climate value.” Finally, we develop research on the alignment and resilience of infrastructure assets given the technological choices available today and tomorrow.


Investors are concerned about physical climate risk and believe that they have almost no idea how it will affect unlisted infrastructure assets; that’s the clear message they delivered when we surveyed them on their views regarding the risks to the asset class.

This paper presents an assessment of transition and physical risks in the privately invested infrastructure sector. Leveraging the NGFS scenarios, we quantified the costs associated with delayed or uncoordinated transition and evaluated the potential portfolio value loss resulting from physical risks in the absence of climate action.

This special issue of the Research for Institutional Money Management supplement to Pensions & Investments, which aims to provide institutional investors with an academic research perspective on one of the most pressing issues facing them today. We first look at the use of data to produce a benchmark or comparable

We show that the physical risks created by climate change are not limited to a distant future for investors in infrastructure, some of whom could well lose more than 50% of the value of their portfolio to physical climate risk before 2050 in the event of runaway climate change.

This infrastructure investment special issue first looks at the use of data to produce a benchmark or comparable (‘comp’) of the climate risks of infrastructure companies.

In the first EDHEC Climate and Finance special issue of the supplement, we contribute an article analysing the outperformance of low-carbon energy infrastructure investments over the past decade.

In the first EDHEC Climate + Finance special issue of the supplement, we contribute an article analysing the outperformance of low-carbon energy infrastructure investments over the past decade.

We develop a methodology to estimate the carbon footprint of thousands of airport infrastructures around the world and test for the existence of a relationship between carbon emissions and realised or expected returns in the private airport investment sector.

In this paper, we develop a methodology to calculate the potential damage associated with different types of physical risks at the asset level, and conduct a practical implementation for flood damages in the airport sector in the United States.

We examine the impact on the risk profile of wind and solar power investments of the increasing dominance of renewables in the energy mix of a given country, using the case of the UK whose economy has made a rapid transition to renewables and away from coal.

In this infrastructure ESG survey, we asked a large sample of investors in infrastructure why they need to have access to ESG data i.e., non-financial data, for the assets they hold or want to hold, examining three main questions.

We explore the role of ESG issues in an investment context, namely how institutional investors should incorporate ESG elements into the financial management of their portfolios. A growing number of investors are pursuing ESG objectives to directly improve environmental and social outcomes.

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