According to a new study from researchers at the Rotterdam School of Management at Erasmus University, investors who consider the long-term risks of climate change on their portfolios are more likely to see the stock market as riskier over the long term, reported Institutional Investor.
As explained by the study’s proponents Mathijs Cosemans, Xander Hut, and Mathijs van Dijk, natural, climate-related disasters often occur in clusters, which is correlated to elevated temperatures. Put another way, one natural calamity is likely to be followed by another, which has implications as catastrophes impact stock market returns.