EDHEC's Climate Finance Research

Facing colossal investment needs to address climate change and ensure sustainable and inclusive development of the planet, governments have voiced high expectations for the financial sector. At the same time, an increasing share of the population expects investment decisions to integrate environmental and social dimensions. Progress has been made, yet there is still a long way to go to building sustainable finance.

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EDHEC Business School has been recognised for over 20 years for its expertise in finance. Our approach to climate finance is founded on a commitment to equipping finance professionals and decision-makers with the insights, tools, and solutions necessary to navigate the challenges and opportunities presented by climate change.

Our dedicated research initiatives and centres cited below delve deep into the complexities of climate finance, focusing on creating robust, actionable tools that can be used and implemented within the financial sector to drive meaningful change. By synthesising cutting-edge research with practical applications, EDHEC stands at the forefront of educating and empowering stakeholders to make informed, responsible financial decisions that align with global sustainability goals. Our work aims not only to advance the theoretical understanding of climate finance but also to offer tangible, data-driven solutions that can facilitate the transition towards a more sustainable and resilient global economy.

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Discover more about EDHEC’s research centres & initiatives

EDHEC Climate Institute

EDHEC Climate Institute’s mission is to help private and public decision-makers manage climate-related financial risks and make the most of financial tools to support the transition to a low-emission economy that is more resilient to climate change. It has a long track record as an independent and critical reference centre in helping long-term investors to understand and manage the financial implications of climate change on asset prices and the management of investments and climate action policies.

The institute has also developed an expertise in physical risks, developing proprietary research frameworks and innovative approaches. ECI is also conducting advanced research on climate transition risks, with a focus on supply chain emissions (Scope 3), consumer choices, and emerging technologies. As part of its mission, ECI collaborates with academic partners, businesses, and financial players to establish targeted research partnerships. This includes making research outputs, publications, and data available in open source to maximise impact and accessibility.

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Scientific Climate Ratings (an EDHEC Venture)

Scientific Climate Ratings (an EDHEC Venture) is a new venture born from EDHEC’s Climate Finance applied research ecosystem. It delivers forward-looking ratings that quantify the financial materiality of climate risks for infrastructure companies and investors worldwide. Leveraging high-resolution geospatial data, proprietary climate risk models, and the world’s largest financial dataset for infrastructure assets, Scientific Climate Ratings evaluates both Transition Risks (linked to the shift toward a low-carbon economy) and Physical Risks (arising from climate hazards such as floods, storms, heatwaves, and wildfires). The ratings offer a dual perspective:

Potential Climate Exposure Ratings assess current exposure to future climate risks under a “continuity” scenario, reflecting the most likely pathway based on today’s global policies and trends.
Effective Climate Risk Ratings go further by integrating climate risk data into financial valuation models across multiple scenarios — each weighted by its probability of occurrence, to estimate the financial effects of climate-related risks through 2035 and 2050.

While initially focused on infrastructure, Scientific Climate Ratings will soon extend its methodology to the listed equities segment, applying the same scientific rigor and forward-looking approach to a broader set of financial assets.

Scientific Climate Ratings aims to set a new standard in climate risk management, driving informed and responsible decision-making for a more resilient future.

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Scientific Climate Indices (an EDHEC Venture)

Scientific Climate Indices (SciX), formerly Scientific Portfolio, is a European climate index provider helping long-term institutional investors integrate financially material climate risks, transition objectives and adaptation efforts into core equity portfolios. Building on Scientific Portfolio’s expertise in portfolio analytics, risk management and portfolio construction, SciX combines climate science and climate-risk data drawing on the broader EDHEC climate ecosystem with quantitative risk management and index engineering. Its approach translates clearly defined climate objectives into investable equity indices while maintaining tight control of financial risk and benchmark deviation..

SciX launches with two initial index ranges addressing distinct climate investment challenges:

The SciX Physical Risk Resilient Index Series is designed to integrate physical climate risk into core equity allocations. Its original top-down framework is designed specifically for index construction and can be enriched with company-level data and customised to investor requirements. In its Core version, the series targets an average 15% reduction in long-term physical climate risk for around one percentage point of tracking error relative to the benchmark.
The SciX Climate Mitigation Index Series provides a pragmatic and financially disciplined approach to climate mitigation, with a focus on real-world decarbonisation. Its methodology accounts for the limitations of emissions data and trajectories, differences in carbon footprints across sectors and the potential consequences of broad exclusions, while testing company-level emissions trends against independent external real-world assessments.

Across both ranges, SciX combines scientifically grounded methodologies with disciplined customisation, supported by financial risk management, live analytics, backtesting and simulation.

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