Stewardship activities, like engagement and voting, are increasingly seen as effective tools for promoting corporate accountability, enhancing long-term value, and driving sustainability.
We study how global equity markets price the physical climate risk associated with tropical cyclones. To assess firms’ exposure to this risk, we use a bottom-up, forward-looking measure of firms’ expected losses to their geolocalized physical assets based on simulated cyclone tracks under different climate scenarios (RCP 2.6, 4.5, and 6.0).