For the creation of my green portfolio, I have decided to use scope 1 emissions as a starting point for my exclusionary investment strategy. My main objective is to create a multi-sector diversified green portfolio through screening the top 50 market-cap stocks in the S&P 500. My target demographic for my green portfolio is younger people under the age of 35. My portfolio will mainly cater to type-A investors, who are ESG aware. This means they have mean-variance preferences, but they use assets' ESG scores to update their views on risk and expected return. Furthermore, my portfolio will be constructed under sustainable finance framework 1. As previously mentioned, scope 1 emissions relate to GHG emissions that a company makes directly. Thus, a successful exclusionary strategy would involve excluding high emitting companies from potential investment. My strategy will be broken down into 5 main steps. Firstly, I will identify industries that are the highest emitters under scope 1 reporting. These are likely to include sectors like oil & gas, transportation and manufacturing. 1 also plan to exclude sin industries (Appendix 1). Vice stocks also commonly labelled sin stocks are firms that are associated with having a negative impact on people and society. The industries that I will label as "sin" are alcohol, tobacco, weapons, gambling and adult entertainment. My portfolio will be made up of US stocks, thus, I have used previous literature that have conducted research regarding sin industries in the US, to guide my identification of sin industries for exclusion. (Hong and Kacperczyk, 2009), (Grougiou et al.,ESG scores as a criteria for exclusion. Moreover, I will use the combined FSG scores on Refimliv Eskon to Jifter our companies with scores lower than a C+ (407). I am using Ct threshold based on Refinitiv Fukon anations of their scoring system (Appendix 2).

Cand shove are labelled green indicating a higher standard of ESG. Score's lower than this are labelled yellow and red indicating satisfactory or poor ESG rated companies. Step 4 will cntail incorporating a profitability measure, I will use earnings per share to represent each compuntes profitability. The benchmark I will set will be no less than 4.5 EPS to ensure that the portfolio appeals to potential investors within my target demographic (Appendix 4). 1 will then select the stocks in which I believe account for the optimal green portfolio. Lastly, I will actively monitor the companies within my portfolio to ensure they continue to meet the standards I have set for inclusion


I want the startegy like above only but after considering my literature review mentioned below and the question is that you want to construct the green portfolio using where the climate risk exposure is minimum. For this, you are looking for a sample of firms that will make the final list of firms to be considered for the portfolio construction. Further, you set up some ground rules as follows: i. Use different types of climate risk (physical, transition or regulatory risk) criteria under your portfolio stock identification strategy.  ii. iii. Your universe is the top 20 market-cap firms in the S&P 500 (https://markets.ft.com/data/indices/tearsheet/constituents?s=INX:IOM) .  After the exclusionary strategy, your final sample of firms will be the subset of these top 20 firms.  What should you produce in the report for this question? a. Outline your climate risk exposure mitigation strategy to identify the sample firms as per the rules mentioned above, and support why you chose this strategy using scientific and economic rationale. (maximum 800 words, 15 marks). 
Consider different types of climate risk mentioned above with using scientific and economic rationale.....Clearly specify that as i have to show the numbers of that factors on excel and I don't want same startegy consider it as a base 

My literature review is mentioned below in summary ....its the summary of my literature review 
A series of studies have found a significant relationship between climate risk and corporate cash holdings in the US. Zhang (2024) and Gounopoulos (2018) both found that climate policy uncertainty and temperature change, respectively, are negatively associated with cash holdings. This suggests that firms increase their cash reserves in response to climate risk. Javadi (2020) further supports this, showing that the precautionary motive for holding cash is particularly strong for financially constrained firms. These findings are consistent with the precautionary motive framework and have important implications for corporate financial management in the face of climate risk.
Research on corporate cash policies under climate change in the US suggests that firms are increasing their cash holdings in response to climate risks (Gounopoulos, 2018; Javadi, 2020). This is particularly evident in financially constrained firms and those in high-carbon-emission industries. The precautionary motive for holding cash is a key driver of this trend. Additionally, climate policy risk is a significant consideration in firms’ financial decisions, leading to more conservative capital structures (Dang, 2020). The role of voluntary corporate action on climate change, driven by business case logic, is also highlighted, with implications for bank practice and government policy (Bowman, 2013).
Research consistently shows that climate policy uncertainty has a significant impact on corporate cash holdings in the US. Zhang (2024) and Gounopoulos (2018) both find a negative association, with Zhang specifically noting a 2-year duration of this impact. This is further supported by Javadi (2020), who provides global evidence of increased cash holdings in response to climate risk, particularly among financially constrained firms. Duong (2018) adds to this by highlighting the role of cash holdings in mitigating the negative effects of policy uncertainty on firm activities, suggesting that these holdings serve as a buffer against uncertainty.
A series of studies have found a positive relationship between climate risk and corporate cash holdings in the US. Gounopoulos (2018) and Javadi (2020) both found that firms increase their cash reserves in response to climate risk, with the latter noting a particularly strong effect among financially constrained firms. However, Zhang (2024) found a negative association between climate policy uncertainty and cash holdings in the US tourism and hospitality sector, with the impact lasting for two years. Heo (2021) further supported the positive relationship, showing that firms with higher climate change exposure tend to hold more cash, particularly after the Paris Agreement. These findings suggest that climate risk can significantly impact corporate cash holdings in the US.
Research consistently shows that climate change has a significant impact on corporate cash holdings in the US. Gounopoulos (2018) and Javadi (2020) both find that firms increase their cash reserves in response to climate risk, with the effect being more pronounced for financially constrained firms. This is further supported by Yu (2022), who identifies a mechanism through which climate change increases the level of cash holdings in response to heightened operating risk. However, Zhang (2024) presents a contrasting view, suggesting that climate policy uncertainty is negatively associated with corporate cash holdings, particularly in the tourism and hospitality sector. This suggests that while climate change may lead to increased cash holdings, the uncertainty surrounding climate policy may have a dampening effect.