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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Although water is an essential input for agriculture and industrial production, it is also scarce in many regions. When it crosses international borders via shared rivers, lakes and aquifers, it can become a source of conflict and contention. Yet while water can be a source of instability, especially in the face of climate change, it can also be a source or catalyst for cooperation and even peace.
The Gulf Cooperation Council’s grid operator is studying the feasibility of a cable to Ethiopia, which would run through currently war-torn Yemen.
Small Island States will be facing dramatically higher adaptation costs to build resilience against the kind of impacts the IPCC projects in its most recent Special Report. Thoriq Imbrahim, former Environment and Energy Minister of the Maldives, urges the international community to attend to the political demands of countries particularly exposed to the impacts of climate change and also confront loss and damage with renewed urgency.
Three years after the talks that delivered the Paris Agreement, the world is gathering in Poland to take stock of the progress that has been made and to raise its ambitions. But as new nationalist leaders take power, has the world lost its appetite for climate action?