Stock prices undercount climate-change risks, and real-estate markets are way way off, paper shows
Your investments, even those presumably in the capable hands of professionals, dangerously undervalue climate-change risks.
That’s the belief held by “an overwhelming margin” of 861 finance academics, investment advisers, portfolio managers, regulators and policy economists anonymously surveyed by Johannes Stroebel and Jeffrey Wurgler of New York University’s Stern School of Business.
Respondents are at least 20 times more likely to believe that climate risk is currently being underestimated by asset markets
as opposed to overestimated, Stroebel and Wurgler said in a peer-reviewed paper discussing those findings and posted through the National Bureau of Economic Research. Asset markets included stocks and bonds, but also real estate and insurance.
Respondents who thought stock prices reflect climate risks “not enough”