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The exposure of French investment funds to transition climate risks
[L’exposition des fonds d’investissement français aux risques climatiques de transition]

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Listed:
  • Tristan Jourde
  • Kolotcholoma Kone

Abstract

Investment funds are exposed to the risks associated with climate change, and especially to transition risks. There are two possible channels of transmission: a fall in the value of the financial assets in fund portfolios (notably “brown assets” which are those issued by companies carrying out activities that are bad for the climate); and investor outflows caused by changes in investor behaviour in response to climate challenges. French funds steadily sold off certain types of brown assets between 2011 and late 2022, and appear to be less exposed to climate risks than their European peers. However, climate risks remain significant and still pose a threat to numerous funds, as an average of 24% of portfolio assets were still brown at the end of 2022. This relatively high share of brown assets also affects the climate risk exposure of financial actors holding shares in these funds (e.g. insurers). Les fonds d’investissement sont exposés aux risques associés au changement climatique, en particulier aux risques de transition. Deux canaux sont possibles : perte de valeur des actifs financiers au portefeuille des fonds (« actifs bruns » notamment, dont l’émetteur exerce des activités néfastes pour le climat) et décollecte des investisseurs faisant évoluer leur comportement d’investissement face aux enjeux climatiques. Les fonds français se sont régulièrement désengagés de certains types d’actifs bruns, entre 2011 et fin 2022, et apparaissent moins exposés aux risques climatiques que leurs homologues européens. Les risques climatiques demeurent cependant importants et affectent de nombreux fonds, avec 24% d’actifs bruns en moyenne dans les portefeuilles fin 2022. Cette proportion relativement élevée de détention d’actifs bruns influe sur l’exposition aux risques climatiques d’autres acteurs financiers qui détiennent des parts de fonds d’investissement (tels que les compagnies d’assurance).

Suggested Citation

  • Tristan Jourde & Kolotcholoma Kone, 2023. "The exposure of French investment funds to transition climate risks [L’exposition des fonds d’investissement français aux risques climatiques de transition]," Bulletin de la Banque de France, Banque de France, issue 248.
    • Handle: RePEc:bfr:bullbf:2023:248:07
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    References listed on IDEAS

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    1. Ojea-Ferreiro, Javier & Reboredo, Juan C. & Ugolini, Andrea, 2024. "Systemic risk effects of climate transition on financial stability," International Review of Financial Analysis, Elsevier, vol. 96(PB).

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