Extreme weather events are reshaping the investment landscape. How can investors protect portfolios—and communities—from the rising physical risks of climate change? In this episode, Kate Webber, Chief Solutions and Technology Officer at the PRI, speaks with Dr Calvin Lee Kwan of Link Asset Management and Simon Whistler, PRI’s Head of Real Assets, to explore how investors can turn climate resilience into both risk management and value creation.
Overview
Physical climate risk is no longer theoretical—it’s here. Floods, fires, and black-rain events are increasing in frequency and intensity, with real financial consequences. Simon Whistler outlines how investors are beginning to quantify and address these risks, yet highlights that fewer than one-third of PRI signatories currently report on physical climate risk metrics. Calvin Lee Kwan shares how Link Asset Management has moved from reactive recovery to proactive resilience—reducing insurance premiums by 11.7% and strengthening investor confidence in the process.
Detailed Coverage
- Physical climate risk today: More frequent and severe events—from typhoons in Hong Kong to floods in Europe—are causing major financial and operational losses.
- Investor action gap: Only 29% of investors report on physical climate risk, compared with 50% in the real-assets space, showing the need for broader engagement.
- Value protection and creation: Link’s sustainability strategy is built on two pillars—protecting existing value through resilience and creating new value through efficiency and stakeholder alignment.
- From risk to return: Engaging insurers with clear, data-driven resilience metrics translated into measurable financial results, proving sustainability can deliver bottom-line benefits.
- Community resilience: Floodwaters don’t stop at property boundaries. Link’s team now collaborates with neighbors, local authorities, and infrastructure managers to build district-level resilience—an approach that benefits whole communities.
- Industry-wide change: Collaboration between investors, insurers, and policymakers is key to building consistent models, pricing resilience into valuations, and driving systemic adaptation.
- Communication as a catalyst: For Calvin Lee Kwan, sustainability comes down to translating resilience into stakeholder-specific value—from stable returns for investors to safety and reliability for tenants.
Chapters
- 00:43 – Welcome and introductions
- 02:08 – Why investors must act on physical climate risk
- 05:07 – How far investors have come—and how far to go
- 07:23 – The cost versus opportunity debate
- 08:43 – Link Asset Management’s practical approach
- 11:48 – A watershed moment: floods and recovery
- 13:34 – Turning resilience into measurable value
- 15:23 – Black-rain events and extreme weather
- 16:59 – Challenges for other investors
- 20:23 – Partnering with insurers to price resilience
- 25:00 – From property-level to community-level resilience
- 27:28 – How resilience links to property valuation
- 30:50 – Final reflections: communication, focus, and leadership
- 32:44 – What is the responsibility of investing
For more details, visit: https://www.unpri.org/climate-change-for-private-markets/assessing-physical-climate-risk-in-private-markets-a-technical-guide/13135.article
Keywords
responsible investment, physical climate risk, resilience investing, PRI podcast, Link Asset Management, insurance and sustainability, real assets, climate adaptation, community...
