Register for Riccardo Rebonato's webinar on "Assessing the impact of climate risk on global equity valuations" (July 2, 2024)

Traditional discounted cash flow models often disregard state dependence by applying the same discount rate/factor to all cashflows occurring at a given date. But can this approach effectively value climate-sensitive securities?

New research by EDHEC-Risk Climate Impact Institute, with support from Scientific Beta, shows that this is not the case, and that the standard valuation tools are not fit for purpose. Using an upgraded integrated climate-economics model, we capture uncertainties in the climate system, physical damages, and discount rates under various emissions abatement policies, and assess the resulting impact on global equity valuations.

• To read the SSRN paper "The Impact of Physical Climate Risk on Global Equity Valuations" : click here

Sensitivity analyses reveal that the severity of the impact on equity markets depends on the pace of abatement, on the precise location of tipping points, and on the continued ability by Central Banks to counter periods of economic distress by lowering rates. The study finds that even in the absence of tipping points, failure to take abatement action can reduce global equity valuation by over 40%.

• To read the latest article "The problems with climate scenarios, and how to fix them" by Riccardo Rebonato on The Conversation Europe : follow this link

We are pleased to invite you to the webinar, on Tuesday, July 2nd, 2024 at 2pm CEST:

"Assessing the Impact of Climate Risk on Global Equity Valuations"

• To register: follow this link

Riccardo Rebonato, EDHEC Professor and Scientific Director of EDHEC-Risk Climate Impact Institute, will provide insights from the forthcoming paper titled "The Impact of Physical Climate Risk on Global Equity Valuations," and discuss investor implications with the audience. This webinar is moderated by Felix Goltz, Director of Research at Scientific Beta.

Please note that a recording of the event will be made available and sent to all registrants after the live session.

This webinar will address the following issues:

• What are the limitations of current climate-aware valuation tools?

• How is the impact of physical risk on equity valuation being underestimated?

• How to make discounting state-dependent and why it matters

• What are the key factors affecting the impact of climate change on global equity valuation?

• What are the implications of the current emissions abatement course for equity valuation?

• Can we rely on a 'Greenspan put' for climate risk?

• What are the implications for investment managers?