Climate risk – Special report 2021

Understanding the impact of climate risk on lending and investment portfolios is now a top priority for the financial sector, and will be one of the biggest challenges it faces in 2022 and beyond.

Analysis commissioned by the UN High Level Climate Action Champions estimates that the private sector could deliver around 70% of total investments needed to meet net-zero goals. A huge step towards this is the formation of the Glasgow Financial Alliance for Net Zero, the 450 members of which – including banks, insurers and investors – have pledged to become net zero by 2050 at the latest. The group has a collective $130 trillion committed to combatting climate change.

As these financial firms begin to transfer lending and investment from carbon-intensive to carbon-neutral firms and clean technologies, more sectors and financial firms will begin to feel the effects. This Risk.net special report contains a collection of articles that consider the impact rising carbon prices will have throughout the economy, discuss the challenges of modelling climate risk exposures and of integrating climate risk into risk management frameworks, and look at the likely trajectory of regulation.

 

Download the full 2021 Climate risk special report in PDF format

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Integrating climate risk into risk management frameworks

As financial firms begin to transfer lending and investment from carbon-intensive to carbon-neutral firms and clean technologies, more sectors and financial firms will begin to feel the effects. In a Risk.net crowd-sourced scenario-generation exercise,…

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