What the study measured
Climate Risk Horizons evaluated 12 mutual fund houses on whether they run and disclose climate scenario exercises and stress tests. Every one of them got a zero. The report also found no disclosure on how a fast clean energy shift, slower policy moves, worsening physical risks, or assets that become uneconomic would flow through to valuations and returns.
Governance vs transparency
All 12 firms do have stewardship setups and some form of climate or ESG oversight. Yet none reported the emissions tied to the companies they finance. The report places Indian managers as outliers worldwide, noting that around two thirds of peers in Asia share at least some scenario work, and the world's largest firms do so even more often.
Why the gap matters
According to Sneha Yadav - the study's lead author and a sustainable finance analyst with Climate Risk Horizons - "Investors need to understand where the risk sits, how it affects investment value and what fund managers are doing about it." The group is urging tighter rules on disclosures, routine testing of portfolios against climate impacts, and a concrete plan to manage those risks.
Sagar Asapur, who leads sustainable finance for Climate Risk Horizons, said that asset managers have a duty to act on financially material risks and "climate risk is obviously one." "We are already seeing physical weather events such as El Niño impact company earnings." The broader economy is exposed too. McKinsey & Co. estimates that higher heat and humidity on their own could threaten as much as $250 billion in yearly output by 2030.
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The bottom line for your portfolio
Indian managers lag peers on climate stress testing disclosures, while the economy faces material weather exposure. That combination raises the stakes for anyone trying to price risk in local funds.
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