The Assessing the Physical Impacts of Climate on Risk-Based Investment Strategies

Abstract

This research examines the imperative for integrating climate policies into risk-based investment strategies, highlighting the role of sustainable investing in mitigating climate change risks and achieving a more sustainable future. The study explores the financial and economic impacts of climate change, including physical risks like extreme weather events and sea level rise, as well as transition risks associated with the shift towards a low-carbon economy. It emphasizes the importance of incorporating environmental, social, and governance (ESG) criteria into investment decisions, prioritizing long-term sustainability over short-term gains. The study concludes that aligning investment strategies with climate policies offers a path toward generating financial returns while contributing to a more responsible and resilient economy. It underscores the need for investors, policymakers, and businesses to embrace a long-term perspective and actively engage in climate-conscious investing practices to ensure a more sustainable future.