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Hedge Fund CFM Sees ‘Big Repricing’ for Banks Over Climate Risks

  • Emissions disclosures aren’t yet precise enough, CFM says
  • ECB is currently measuring banks’ exposure to global warming
Rooftop Solar Farm atop a Residential Building in Bengaluru
Photographer: Dhiraj Singh/Bloomberg

Capital Fund Management SA is looking more closely at all the ways in which banks’ climate exposure will start to feed into their share prices, as regulators roll out increasingly tough environmental, social and governance rules.

For now, banks’ climate disclosures aren’t precise enough to allow meaningful bets on their market values, said Pierre Lenders, head of ESG at Capital Fund Management in Paris. But with a barrage of requirements being rolled out -- from climate stress tests to emissions disclosure rules -- investors should be ready for that to change in a major way, he said.