ABSTRACT
This paper presents a simple holistic approach to build climate risk-resilient investment portfolios based on the three key objectives of the Paris Agreement: climate change mitigation, climate change adaptation, alignment of financial flows with a low-carbon, climate resilient pathway. We explain the financial rationale to adopt such an approach and identify the appropriate investment metrics for portfolio construction, as well as building an innovative investment framework that can be applied across geographies and asset classes. We illustrate how this framework can be implemented to construct a bond portfolio across Asian Infrastructure Investment Bank (AIIB) member geographies and propose a governance mechanism to support positive externalities in the building of sustainable capital markets.