The winning paper from pension scheme Nest, Harnessing Climate Data, demonstrated what the judges felt was an example of what can happen when genuine cross-sector collaboration is achieved.

Working in partnership with UBS Asset Management and Oxford Sustainable Finance Group, the paper produced research that is grounded in real investment activity, backed by robust evidence, and designed to be used across the industry.

The paper considered the tools investors use to assess physical climate risk and identify where they were falling short. This was achieved by assessing ten physical climate risk data providers. From there, the analysis looked at whether each provider analysed risk at the level of individual assets, what climate models they used, whether they acknowledged uncertainty in their outputs, and how they explained their methodology.

The analysis revealed a 14.79% negative correlation between the financial impact scores of two leading data providers, suggesting that inconsistent data is shaking investor confidence.

The paper sets out four actions for data providers, companies, regulators, and investors with a view to making it a practical guide for how physical risk can be managed.