Evaluating Physical Climate Risk

Our team of graduate consultants is currently engaged at an asset management firm with assets under management of $652 billion across 51 locations operating in 25 countries. As a part of our preliminary research, we are investigating the prevalence of physical climate risk within a varied portfolio of publicly listed securities. Our research involves analyzing trends in sustainable investment, identifying opportunities in the market, and conducting a landscape analysis to evaluate the impacts of physical climate risk on diverse companies and industries. The objective is to support investors in making informed investment decisions and help investee companies implement cost-effective strategies for climate adaptation.

Team Culture

Although we took a while to understand each other’s strengths and weaknesses, I can confidently say now that we have begun to work like a team. All of us have a basic understanding of what is required from each team member during the week, and we keep switching roles just so that every team member has an opportunity to interact or present to the client. Aside from the requirements from the project, I am very thankful that my team members are very understanding and willing to take on additional responsibility if a team member has other commitments during a particular week.

Client Relationship

Our client is very invested in our project and gives very timely feedback on what needs to be the focus for the week. It is safe to say that we share a very good relationship with the client, and one thing that helps to strengthen this relationship is that we meet in-person with the client once a month apart from the weekly meetings on zoom. Although the client was initially not very specific in terms of the scope of the project, we feel that our team and the client are gradually getting on the same page. What started off as a very broad scope has now been narrowed down meaningfully through insightful research and feedback sessions.

Project Challenges & Journey Ahead

Although all team members have a basic understanding of the project and financial analysis, this project is challenging in the fact that its portfolio of securities is very broad and to come up with a one size fits all approach/framework is challenging in the ever-physical changing climate risk landscape. One example of the challenges we face is that if we are looking at physical climate impact, it took us 2 to 3 weeks of research to narrow down the scope and finalize on which sectors to focus on based on the physical climate risk that they could be exposed to.

Introduction to Impact Investing

Although I have done quite a few academic research projects on impact investing, and financial analysis for classroom projects, this is the first time that I have got to sit down and work within an asset management firm with real time data, and scenarios. I believe that this is essential to be able to transform all the classroom learning into practical skills in a professional environment.