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Max Dugan-Knight's avatar

I'm seeing fewer explicit references to IAMs in pension fund climate disclosures, and more to Climate Value at Risk (CVaR) analyses generally provided my MSCI or WTW. For example, Japan's GFIP, New Zealand Superfund, and Norway's NBIM all mention using CVaR.

My sense is that, partially due to your and others' critique of DICE models and other IAMs, the funds have stopped using them or at least they've stopped referring to them explicitly. I'm curious what you make of this CVaR approach. I am having a hard time finding specifics on how it works. It seems to sometimes produce larger negative impact projections (GFIP estimates up to -9.3% impact on its returns and NBIM up to -13% in a 3°C world). I'm sure this approach cannot account for all climate risks like migration, tipping points, etc. but I'm curious if you have any specific knowledge of the framework and what it may be getting wrong.

I'm a huge fan of your Loading the DICE report. Thanks in advance.

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Alexander Leipold's avatar

Dear Steve, the Climate Brink Podcast is making a valid point: we can't safe the climate (and ourselves) without pushing back corporate power. https://open.substack.com/pub/theclimatebrink/p/i-stand-with-unions?utm_source=share&utm_medium=android&r=bg9mo

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