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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Water is a matter of survival and plays a critical role in social, economic and environmental activities as well. With a rise in global demand for water, water crises have consistently featured among the World Economic Forum’s top global impact risks. Water insecurity, i.e., the lack of water availability for basic human needs and socio-economic development, undermines billions of livelihoods and poses significant risks for peace and prosperity by thwarting progress and fuelling displacement and conflict.
Limited access to energy is a significant barrier to development and holds back efforts to improve living conditions in developing and emerging economies. Around the world, 1.1 billion people still do not have access to electricity, and 2.8 billion still rely on animal and crop waste, wood, charcoal and other solid fuels to cook their food and heat their homes.
As the earth’s climate warms, people face mounting threats from rising seas, and more intense and frequent storms, heatwaves, fires, and droughts. When these events hit, people want to understand whether they are connected to climate change. Linking climate change with heatwaves, storms and other events can help us prepare for a changing world, argues Peter Stott.
A recent report by the UNEP focuses on addressing trade in wildlife and forest products across the three sectors of crime prevention and criminal justice, trade regulation and natural resource management. It finds that there is less focus on the legislative means for preventing offenses related to trade in wildlife and forest products and more attention on the means for detecting and punishing such offenses.