An overwhelming majority of investors consider that climate risk will have a highly significant impact on their infrastructure investment but say that they do not know how to measure this risk and therefore manage it, according to research.
The EDHEC Infrastructure & Private Assets Research Institute said investors had “significant apprehensions and knowledge gaps” about the topic.
Concerned investors emphasised the “urgent need” for better data and information regarding physical climate risks in infrastructure investments.
Among key findings from the survey, which polled 70 investment industry professionals including managers with over US$2 trillion under management, were that 97% of investors polled believe that physical climate risk is significant and 76% anticipated a medium or high impact of climate risk on their infrastructure investments.
However, only 16% believe that there is adequate understanding of how physical climate risk will affect infrastructure assets.
“The survey’s findings underscore the critical need for better understanding and management of physical climate risk in infrastructure investments. Despite the high stakes, there is a clear gap between the perceived significance of climate risk and the ability to evaluate and mitigate its impact effectively,” said Frédéric Blanc-Brude, a director at the EDHEC institute.
The survey is called ‘Physical climate risk survey: those in the infrastructure investment industry are concerned and lack data’.
