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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With global climate action stagnating, sustained community-driven initiatives can fill the governance gap and also help mitigate climate-related security risks in South Asia.
The longstanding dispute over water rights among Egypt, Sudan and Ethiopia escalated in 2011 when Ethiopia began construction of the Grand Ethiopian Renaissance Dam (GERD), in the absence of any agreement with downstream Egypt. The GERD dispute offers an alarming insight into just how dangerous future transboundary water disputes may become, particularly in the context of a changing climate.
Though focused on climate change, National Adaptation Plans offer important assessments of the risks a country faces and can be valuable in devising comprehensive pandemic response strategies.
Women in the region suffer disproportionately from climate impacts, but they also play an essential role in addressing climate change. With the right policy responses, it is possible to reduce security risks and empower women to better address the challenges they face.