The IPCC Special Report finds that current policies are not sufficient to limit global warming to well below 1.5°C, and that the gap between the actions on the ground and the required changes in order to meet the global goal is widening rapidly. One reason is that scientific assessments based...

Climate risk brings about a new type of financial risk that standard approaches to risk management are not adequate to handle. We develop a model that allows to compute the valuation adjustment of corporate and sovereign bonds conditioned to climate transition risk, based on available...

The analysis of the conditions under which, and extent to which climate-adjusted financial risk assessment affects firms’ investment decisions in the low-carbon transition, and the realisation of the climate mitigation trajectories, still represent a knowledge gap. Filling this gap is crucial...

The analysis of the conditions under which, and extent to which climate-adjusted financial risk assessment affects firms’ investment decisions in the low-carbon transition, and the realisation of the climate mitigation trajectories, still represent a knowledge gap. Filling this gap is crucial...

The analysis of the conditions under which, and extent to which climate-adjusted financial risk assessment affects firms' investment decisions in the low-carbon transition, and the realisation of the climate mitigation trajectories, still represent a knowledge gap. Filling this gap is crucial to...

Aligning finance to sustainability requires methodologies to price forward-looking climate risks and opportunities in financial contracts and in investors' portfolios. Traditional approaches to financial pricing models cannot incorporate the nature of climate risk (i.e. deep uncertainty,...

Aligning investments to the climate and sustainability targets requires the introduction of stable climate-aligned policies. In this regard, a global Carbon Tax (CT) and a revision of the microprudential banking framework via a Green Supporting Factor (GSF) have been advocated. However, our...

The financial system could play a main role in achieving the global climate targets by aligning investment flows to sustainability. However, investors are still largely exposed to carbon-intensive assets that could become stranded. In addition, they are not pricing yet climate risks and...

The role of development finance institutions in low-income and emerging countries is fundamental to provide long-term capital for investments in climate mitigation and adaptation. Nevertheless, development finance institutions still lack sound and transparent metrics to assess the exposure of...