Climate change and financial risk

Abstract

Climate change is one the defining emerging challenges of our times. The relation between climate change and finance is two-sided. On the one hand, climate change poses a new type of risk for finance, which traditional approaches are not well-suited to describe. On the other hand, finance’s perception of climate risk has an impact on investments that support climate change mitigation and adaptation. Therefore, an adequate assessment of climate risk by the financial sector is key to avoid under-investments in climate action. This talk provides an overview of the state-of-art on the subject and why it matters for citizens and academics outside the finance discipline.