Norges Bank Investment Management (NBIM) is on the hunt for new research to help universal owners better understand the implications of climate change on financial decision-making.

The asset manager, which runs some $1.6trn on behalf of Norway’s sovereign wealth fund, has issued a call for institutions and researchers “that can facilitate further academic discourse” around how climate relates to “us as a long-term and globally diversified investor”.

In a call for proposals published on its website recently, NBIM suggests that research could look at how effective investors’ climate decisions are at actually reducing CO2 emissions or achieving other real-world outcomes.

Researchers could also choose to focus on the interaction between climate, nature and financial risks: namely companies’ financial exposure to planetary boundaries, how asset prices are affected, how risks and opportunity can be quantified, or how beliefs are formed about the severity of such risks or opportunities.

NBIM noted that analysis of the interplay between geopolitics, industrial transformation, net-zero goals, international cooperation and access to raw materials in the context of the climate transition would also be welcome.

In 2011, Norges Bank set up the Norwegian Finance Initiative, through which is seeks to help Norwegian academic institutions attract international researchers and to fund and assist with relevant research.

In 2017, it awarded grants to Columbia University and New York University for two research projects. The first focused on hedging against environmental risks and addressing the need to update discount rate estimates, while the second involved convening academics and investment practitioners at dedicated conferences on climate change and capital market efficiency.

“Since our initial funding for research projects on the Financial Economics of Climate Change in 2017, the body of academic research on climate change has grown substantially, leading to a more nuanced understanding of the effects of climate change on asset prices,” said NBIM in a statement.

Despite this progress, it added, there is limited understanding of the relationship between climate transition and issues such as changing trade policies and nature risks.

“An orderly climate transition relies on government policies to address negative externalities and on the incorporation of their likely effects by financial markets.

“Given the passage of time, as well as the different time horizons, incentives, and capabilities of various market participants, it is important to evaluate the effectiveness of climate actions undertaken so far and to further develop them based on research,” it added.

Proposals, which can be for projects of up to three years, will be assessed by NBIM’s in-house scientific advisory board.

The deadline for submission of proposals is 13 September 2024.

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