Investors are, by necessity, experts at taking calculated risks. They scan the horizon of our ever-evolving world for new and sometimes unexpected economic challenges so that they can put their money where it’s most likely to grow. Today, financial institutions are facing one economic challenge that will fundamentally change the way we do business—climate change.
Climate change is a risk that, while significant, is oftentimes misunderstood by the financial community. A warmer world introduces new, complex and interwoven layers of risks ranging from physical, financial, regulatory and reputational. So WRI and the UNEP Finance Initiative (UNEP FI) worked with more than 150 participants from the financial sector to create the Carbon Asset Risk Discussion Framework, a tool to help financial institutions undertake the difficult task of identifying and understanding climate-related risks to their portfolios.
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The European Green Deal has made the environment and climate change the focus of EU action. Indeed, climate change impacts are already increasing the pressure on states and societies; however, it is not yet clear how the EU can engage on climate security and environmental peacemaking. In this light, and in the run-up to the German EU Council Presidency, adelphi and its partners are organising a roundtable series on “Climate, environment, peace: Priorities for EU external action in the decade ahead”.
In January 2020, the German Federal Foreign Office launched Green Central Asia, a regional initiative on climate and security in Central Asia and Afghanistan. The aim of the initiative is to support a dialogue in the region on climate change and associated risks in order to foster regional integration between the six countries involved.
Climate change will shift key coordinates of foreign policy in the coming years and decades. Even now, climate policy is more than just environment policy; it has long since arrived at the centre of foreign policy. The German Foreign Office recently released a report on climate diplomacy recognizing the biggest challenges to security posed by climate change and highlighting fields of action for strengthening international climate diplomacy.
A high-level ministerial conference in Berlin is looking at the impact of climate change on regional security in Central Asia. The aim is to foster stronger regional cooperation, improve the exchange of information and form connections with academia and civil society.