Modern Portfolio Theory

Sustainability Oxford 2023

How to rewrite Modern Portfolio Theory to integrate climate risk

When it comes to climate risk, traditional scenario analysis leaves investors with more questions than answers and omits uncertainty around physical risk and the interaction between physical risk, inflation and tipping points. Investors need to abandon modern portfolio theory and find a new approach that focuses on short-term scenarios.

Sarah RundellNovember 14, 2023

Sustainability

No single right way: Constructive real-world pragmatism for finance

Examining and learning from the evolution of orthodox finance provides relevant insight to the evolution of ESG data and ISSB standards which like CAPM are simply social conventions. Greg Watson argues that adopting a “no single right way” mindset will create greater resilience in investment by promoting greater differentiation.

Greg WatsonAugust 17, 2022

Investor Profile

War in Ukraine threatens net zero targets

The UK's BT Pension Scheme's CIO Wyn Francis reflects on the pressure war in Ukraine will put on investors net zero targets.

Sarah RundellMarch 22, 2022

Featured Story

Examining the limits of modern portfolio theory

The definition of what it means to invest is changing, according to Jon Lukomnik and James P. Hawley, which means examining the limitations of the 75-year old legacy of modern portfolio theory.

Jon Lukomnik and James P. HawleyMay 27, 2021

Opinion

ESG policy initiatives gain momentum

PRI is working on aligning Europe’s financial system with sustainability objectives, as ESG-related initiatives gain momentum globally. Head of policy and research, Nathan Fabian, explains.

Nathan FabianNovember 3, 2017

Investor Profile