Document Type

Article

Publication Date

2023

DOI

10.3390/jrfm16030153

Publication Title

Journal of Risk and Financial Management

Volume

16

Issue

3

Pages

153 (1-22)

Abstract

This paper explores the strategies and practices of capturing climate risk premia for venture capital (VC) fund managers and entrepreneurs in the private cleantech sector. It also examines the impact of the feed-in tariffs (FITs) policy on the management of cleantech investments. It is shown that a longer investment period, less investment capital in cleantech investment management strategies, and optimistic climate risk management practices will help investors to better capture climate risk premia. In fact, the FITs policy will give rise to VC fund managers and entrepreneurs having a positive view regarding the prospects of the cleantech sector, motivating them to make long-term investments. Furthermore, it is shown that the greater the impact of the FITs policy, the greater the climate risk premia to be captured. In addition, the captured climate risk premia are greater in weaker economic conditions and in times of increased uncertainty with regard to product demand.

Rights

© 2023 by the authors

This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution 4.0 International (CC BY 4.0) License.

ORCID

0000-0003-2695-9642 (Zheng)

Original Publication Citation

Li, L., & Zheng, X. (2023). How do sustainability stakeholders seize climate risk premia in the private cleantech sector? Journal of Risk and Financial Management, 16(3), 1-22, Article 153. https://doi.org/10.3390/jrfm16030153

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