Climate fiduciaries: part III – mind the model gap

Climate models help pension funds estimate the financial costs of climate change, they are often imperfect. Do pension funds have a fiduciary obligation to critically engage with the models they adopt?

(...) Riccardo Rebonato, senior advisor at the EDHEC Climate Institute notes another key drawback. He points out that in the early days, physical risks became more of an afterthought. As a result, the financial consequences of climate change were underestimated.(...)