2021/06/18 by Stefano Giglio, Bryan Kelly, Johannes Stroebel · 5 citations
Economics, Econometrics and Finance · #Housing Market and Economics #Climate Change Policy and Economics #Insurance and Financial Risk Management
paper · doi:10.1146/annurev-financial-102620-103311
openalex publication_date 2021/06/18 · openalex created_date 2022/05/12 · openalex updated_date 2026/07/31
In this article, we review the literature studying interactions between climate change and financial markets. We first discuss various approaches to incorporating climate risk in macrofinance models. We then review the empirical literature that explores the pricing of climate risks across a large number of asset classes, including real estate, equities, and fixed income securities. In this context, we also discuss how investors can use these assets to construct portfolios that hedge against climate risk. We conclude by proposing several promising directions for future research in climate finance.