Introduction
The Society of Actuaries (SOA) Climate and Environmental Sustainability Research Committee awarded Sally Shen, Research Associate, Global Risk Institute, first prize for her three page essay “What Makes Green Investment a Puzzle” in May 2019.
Despite the accessibility of the green financial market, the increasing financial risks that may occur due to climate change, and the awareness of the shift toward more stringent climate mitigation policies in many countries, the motivation behind investing in green financial instruments is, at present, more of a moral choice than a speculative opportunity. This essay argues that the myth behind the motivation of green investment is driven by both unknown knowns and unknown unknowns.