Climate risk and financial institutions: challenges and opportunities

This publication is intended to help financial institutions analyze the risks associated with climate change. It encompasses the risk of being affected by a natural disaster (such as droughts, floods and storm events) among the factors that can weaken financial performance and conditions for both equity and debt. It calls for loss contingency projections—reserves required to allow for potential disasters or other known risks—to be increased as the risks of climate change become more likely and better quantified. It also addresses offices and investments located in countries that are more susceptible to natural disasters, as well as national infrastructure (energy, water, telecommunications, etc.) vulnerable to dislocation.

The overall aim of the publication is to provide critical information and tools for financial institutions and the private sector to make smart decisions in the face of climate change, helping to create a better and more prosperous future for us all.