Limitations and assumptions of commonly used climate-change scenarios in financial services.
Authors: Sandy Trust, Sanjay Joshi, Tim Lenton, Jack Olive
Abstract – It is critically important for stewards of capital (and technology) to account for the state of the natural world, including climate change, ecosystems and non-human entities, when thinking through their investment strategies. A tick-the-box approach is no longer good enough… Economic models based on data are used to make future predictions. With climate change there comes the possibility of “Sudden Revaluation”. Global insurance and industrial finance, is excluding vast number of risks, climate science and emerging environmental patterns. The same policies and models are being applied to make long term projections about housing, food, energy etc promising “future rewards”. The transition is also lacking “realistic assessment of risk,”
