Funds Hoarding Alternative Assets Face ‘Very High’ ESG Risk
- Portfolios risk seeing 50% NAV loss in worst-case scenario
- EIOPA has already taken some steps to address climate risk
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Europe’s watchdog for pensions and insurers is being called on to tackle risks building in portfolios packed with alternative assets, many of which may now be facing “significant” climate-related losses, according to a fresh study.
In an open letter sent to the European Insurance and Occupational Pensions Authority, Noël Amenc, a professor at the EDHEC Business School, and Frederic Blanc-Brude, director of the EDHEC Infrastructure & Private Assets Institute, warn that some pension firms and insurers may see their portfolio values halved before 2050 due to the physical fallout of climate change.