Climate Change: Managing the Financial Risk and Funding the Transition

by Jing Zhang

Climate Managing the Financial Risk and Funding the Transition serves as a practical and accessible reference for an essential understanding of climate-related risks and opportunities in financial institutions.Climate change is the most profound challenge our social, political, and economic systems have ever faced. We are at an inflexion point in how to deal with it. On the one hand, climate change poses significant, emerging risks to financial institutions and financial stability. The risks are not well understood, measured, or quantified as financial institutions try to incorporate them effectively into their risk management practices. On the other hand, massive amounts of capital will be required to finance climate resilience and transition, creating significant demand for new financial products and services.

One of Risk Books' most prolific editors, Jing Zhang, has gathered more than 30 experts from world-leading financial and consultant institutions, including commercial banks, institutional asset managers, insurance firms, strategic consultancies and climate specialists, to contribute 16 chapters. Climate Managing the Financial Risk and Funding the Transition serves as a practical and accessible reference for an essential understanding of climate-related risks and opportunities in financial institutions.

The book is structured into four
Part 1: Overview
Explains how climate change manifests as a source of economic and financial risk. Chapters in this section lay the foundation for the subsequent sections by describing climate change’s regulatory and legislative landscape within the financial sectors and providing an overview of climate risk tools and analytics.

Part 2: Framework, Methodology and Tools
Focuses on the frameworks, methodologies, and tools for assessing and managing the financial impacts of climate change. Chapters cover critical details of identifying and modelling physical and transition risks and embedding the results in decision-useful financial metrics.

Part 3: Managing Climate-Related Risk
Features a practical set of topics for managing climate-related risks, from incorporating climate change in asset allocation and portfolio construction in investment management, constructing a net-zero investment portfolio, to special considerations for small financial institutions such as community banks.

Part 4: Climate Finance
Discusses funding climate resilience, adaptation, and the transition to a low-carbon economy.

Kindle Edition

Published August 29, 2022