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...

In this paper we analyze whether and how a central bank can pursue the objective to lower its exposure to climate-related financial risks in its asset purchase programs while meeting the criteria that define the eligible universe of assets, including market neutrality. Despite focusing on the...

Climate risk brings about a new type of financial risk that standard approaches to risk management are not adequate to handle. Amidst the growing concern about climate change, financial supervisors and risk managers are concerned with the risk of a disorderly low-carbon transition. We develop a...

Current approaches to manage the COVID-19 pandemic have a narrow focus on public health and on the short-term economic and financial repercussions. This prevents us to look at how pandemic risk interplays with sustainable and inclusive development goals in the next decade. To fill this gap, we...

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...

While there is a broad understanding that the financial system can play a major enabling role in achieving the low-carbon transition, it is not well understood under which specific conditions such an orderly transition scenario when finance works as an enabler could occur. Even more importantly,...

The financial system, the ecosystem of investors (e.g., banks, investment funds, insurance), markets, and instruments, is often considered to play an enabling role in climate mitigation pathways to a low-carbon transition. But it can also have a hampering role, e.g., if investors’ perceptions...