How does climate risk change expected returns?
Climate risk is becoming an increasingly important factor for investors and pension funds assessing expected returns. At a conference hosted by Copenhagen Business School, more than 200 researchers and finance professionals explored how climate change could affect financial markets and long-term investment decisions.
When climate risk becomes financial risk
Climate change is not only an environmental challenge. For investors, pension funds and financial institutions, it raises fundamental questions about risk and return.
How will a changing climate affect economic growth? How should physical climate risks and the transition to a low-carbon economy enter financial models? And what do they mean for the returns investors can expect over the next 10, 20 or 30 years?
These questions brought more than 200 participants from academia, pension funds, financial institutions and public organisations together at the Climate Risk and Expected Returns conference in Copenhagen on 24 August 2026.
The conference was hosted by the Council for Return Expectations and the Pension Research Centre (PeRCent) at Copenhagen Business School.
Bringing research and practice together
Throughout the day, researchers and practitioners explored climate risk from different perspectives – from climate science and macroeconomics to asset pricing and investment management.
Speakers included Rasmus Bessing from PFA, Björn Griesbach from Allianz Investment Management, John Hassler from Stockholm University, Diego Känzig from Northwestern University, Adrian Lema from the Danish Meteorological Institute, Johannes Stroebel from NYU Stern School of Business and Lasse Heje Pedersen from Copenhagen Business School.
The programme also brought together panellists and experts from across academia and the financial sector, including Jasper Riis from P+, Sasja Beslik from SDG Impact Japan, Mette Kanstrup Petry from Nationalbanken and Ann Frank Andresen from Nordea Pension.
Their contributions addressed a shared challenge: climate change unfolds over long horizons and involves considerable uncertainty, while investors still need to make decisions today.
Turning climate knowledge into investment decisions
For pension funds in particular, the question is difficult to avoid. Their investment horizons stretch decades into the future, making assumptions about long-term economic developments and expected returns central to decisions made today.
Climate change adds another layer of uncertainty.
Understanding that uncertainty requires dialogue across disciplines. Climate science can provide insights into physical changes and possible scenarios. Economics can help explain their effects on growth and society. Finance can explore how risks may be reflected in asset prices and expected returns.
Bringing these perspectives together was at the heart of the conference.
A conversation that continues after the conference
The conference demonstrated the value of connecting new research with the questions faced by investors and policymakers in practice.
There may not be one simple answer to how climate risk should enter long-term return expectations. But improving our understanding of the links between climate, the economy and financial markets can help investors ask better questions – and make better-informed decisions.
Presentation slides and conference photos are being made available on the conference website as speakers approve their materials.
Explore the presentations and materials from the Climate Risk and Expected Returns conference.
