4 December | Online

More than a year after the publication of Carbon Tracker’s Loading the DICE Against Pensions report – highlighting how pension funds are relying on economic research which ignores critical scientific evidence about the financial risks embedded within a warming climate ​– climate models and their application remains a hot topic.  

This session will present the findings of the DICE report, the role of climate models in informing financial decision making and strategic asset allocation, and a wider discussion on the flaws of mainstream climate models, their application across the financial services industry, and ways investors can respond to the problems identified.  

📉 What? – This event will delve into the use and limitations of climate scenarios within the financial decision-making process. 

💡Why? – Many climate scenarios underestimate physical risks. Understanding the limitations and uncertainties in climate scenario analysis is crucial for effective risk management and informed decision-making. 

This webinar seeks to: 

• Inform investors of the problems related to climate modelling and climate risk advice offered by investment consultants, as highlighted in the DICE report, making the fundamental point that the models are not used to select or assess asset managers and therefore do not influence capital flow. 
• Provide insights on how investors are using climate models, how they interpret climate scenario analysis and incorporate this information into financial decision making, based off previous discussions with pension funds. Mention reasons why the models have not been useful (e.g. focus is too long term & the models do not split physical and transition risks) and closing the gap between investment advice and decarbonisation. 
• Understand the flaws of mainstream economic approaches to climate risk and offer solutions around scenario design. Explain the emergence and purpose of narrative approaches to be used alongside the numerative approach. Linked to this, discuss the takeaways from the USS report on climate scenario use, informing narrative scenarios gap between findings.  
• Provide a set of takeaways for investors including practical strategies to overcome limitations, and key questions to take back to your teams, clients, and policymakers.