Climate scenarios are essential tools for assessing the financial impacts of climate risks and taking resilience measures. While they are not forecasts that can anticipate the future, these scenarios provide significant frameworks about plausible futures associated with climate change, facilitating risk management for financial decision-makers. They are widely used by various actors ranging from central banks to financial institutions and policymakers.…
From extreme weather to policy disruption, climate risks manifest in two distinct yet financially relevant forms: Physical and Transition. These risks are urgent and material, with significant financial impacts, especially for infrastructure projects with long investment horizons. Exposure to physical risks such as floods and heat stress can result in a significant loss in value for infrastructure assets. According to a…
Climate risks are material financial risks. Yet, for a long time, the financial world has mostly reacted to climate threats as they happened. They also relied heavily on Environmental, Social, and Governance (ESG) reporting to demonstrate compliance and show that they are “following the rules”. However, this checklist approach is increasingly losing both relevance and credibility among investors and issuers,…