Sustainability risks and chances
To reach the Paris climate targets, climate neutrality must be achieved on a global level in the first half of the 21st century. The financial sector has an important role to play in the transition towards a climate-friendly economy.
Aside from the physical risks of climate change, such as crop failures, floods, or droughts, there are far-reaching transition risks, e.g., through climate polices or technological breakthroughs, which affect both industrial companies and financial actors. What conditions allow companies to identify transition opportunities and risks and to consider them sufficiently in their investment decisions? What is the financial sector’s contribution and how can climate risks be measured and implemented in risk management?
Research topics:
- Scenario analysis and stress testing
- Risk analysis and management
- Business strategy
- Transition
- Economic transformation
- Financial market stability
- Climate neutrality
Publications
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Policy Brief, Sustainability Risks and Opportunities
PB 6/2022: The first ECB bottom-up climate stress test: dealing with data gaps and methodological challenges
The ECB’s “SSM Climate risk stress test,” published in July 2022, provides an important step toward integrating climate change related risks into the banking system.…
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Policy Brief, Sustainability Reporting, Sustainability Risks and Opportunities
PB 5/2022: Standardized stress test scenario can improve climate risk reporting
More and more countries, regions, cities, companies, and financial institutions are defining climate neutrality as a strategic goal. So far, however, it is not possible…
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Policy Brief, Sustainability Reporting, Sustainability Risks and Opportunities
PB 9/2021: The EU sustainable finance strategy – Implications for the future German Federal Government
The EU’s revised sustainable finance strategy confirms the important role of the financial sector in the sustainability transition of the economy, but does not sufficiently…
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Policy Brief, Sustainability Risks and Opportunities
PB 5/2021: Scenario Analysis as a Tool for Companies, Investors, and Regulators on the Path to Climate Neutrality
The structural transformation necessary for achieving climate neutrality is characterized by many interdependent changes. Shaping the transition to a zero-emissions economy cannot be based on…
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Scientific publication, Sustainability Risks and Opportunities
The Geneva Papers on Risk and Insurance – Issues and Practice: Are insurance balance sheets carbon-neutral? Harnessing asset pricing for climate change policy
Due to its enormous size and capital base, the insurance industry has the potential to play a key role in countering climate change. To this…
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