Specific challenges within the finance sector identified by Brunel include:

  • An emphasis on short-term rather than long-term performance, which drives short-term thinking by investors and companies
  • An unwillingness by asset managers to invest in the low carbon economy, especially in areas which depend on public support or where technologies are perceived to be unproven
  • Backward-looking investment risk models that are inherently flawed at taking future climate risk into account
  • Instances of perverse incentives and conflicts of interest throughout the system – not least, the use of conventional market-weighted benchmarks to measure performance, when climate risk is not adequately priced by the market