Climate Change and Financial Risk

This chapter is an introduction to climate change risk for the financial sector (banks and investors). We propose to cover how the topic emerged, what it means for financial institutions, what are the specific types of approaches to address it as well as related developments in the industry, how regulation is approaching the question, and what are the next steps for academic research. The chapter is aimed at financial professionals, researchers and policymakers in the area of banking and investment who seek to understand where this new field of research currently is and what evolutions are to expect. The chapter’s ambition is to provide the reader with a snapshot of the current state of the art and guidance on the relevant literature to go further.