Climate Risk and Financial Institutions : Challenges and Opportunities

This report analyzes in some detail the risks to project finance and the performance of real-sector investments. Options, futures, derivatives, foreign exchange and more exotic instruments are not specifically addressed. The objectives of instituti...

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Bibliographic Details
Main Authors:	Stenek, Vladimir, Amado, Jean Christophe, Connell, Richenda
Format:	Report
Language:	English en_US
Published:	International Finance Corporation, Washington, D.C. 2017
Subjects:	ABATEMENT ACTION ON CLIMATE CHANGE AGRICULTURAL COMMODITIES AIR AIR CONDITIONING AIR DENSITY AIR EMISSIONS AIR HUMIDITY AIR TEMPERATURE AIR TEMPERATURES ALLOCATION ALTITUDE ASSET VALUE BIODIVERSITY CONSERVATION CAPITAL GAINS CARBON CARBON ABATEMENT CARBON FERTILIZATION CHANGES IN PRICES CLIMATE CLIMATE CHANGE CLIMATE CHANGE ACT CLIMATE CHANGE ADAPTATION CLIMATE CHANGE IMPACT CLIMATE CHANGE IMPACTS CLIMATE CHANGE PROJECTIONS CLIMATE CHANGE RISK CLIMATE CHANGE RISK MANAGEMENT CLIMATE CHANGE RISKS CLIMATE CHANGES CLIMATE CONDITIONS CLIMATE DATA CLIMATE FACTORS CLIMATE IMPACT CLIMATE IMPACTS CLIMATE INFORMATION CLIMATE MODEL CLIMATE RESILIENCE CLIMATE RISK CLIMATE RISKS CLIMATE TRENDS CLIMATE VARIABILITY CLIMATE WARMS CLIMATE-CHANGE CLIMATE-CHANGE SCENARIOS CLIMATE-SENSITIVE SECTORS CLIMATIC CONDITIONS CLIMATIC FACTORS CLIMATIC SENSITIVITY CLIMATIC STRESSES CLIMATICALLY SENSITIVE CO COMBUSTION COMBUSTION EFFICIENCY COMMERCIAL INSURANCE CONSEQUENCES OF CLIMATE CHANGE CONSUMER PRICE COST OF INSURANCE COSTS OF CLIMATE CHANGE DAMAGES DESERTIFICATION DESERTS DIESEL DIESEL GENERATORS DIRECT IMPACTS OF CLIMATE CHANGE DISCOUNT RATE DISCOUNT RATES DROUGHT ECONOMIC BENEFITS ECONOMIC CONDITIONS ECONOMIC GROWTH ECONOMIC IMPACT ECONOMIC IMPACTS ECONOMICS OF CLIMATE CHANGE ECOSYSTEM ELECTRIC POWER ELECTRICITY ELECTRICITY CONSUMPTION ELECTRICITY DEMAND ELECTRICITY GENERATION ELECTRICITY PRICE EMISSION EMISSIONS EMISSIONS SCENARIO ENERGY DEMAND ENERGY PRICES ENERGY SECURITY ENERGY USE EVAPORATION EXTREME CLIMATE EVENTS EXTREME CLIMATIC EVENTS EXTREME EVENTS EXTREME HEAT EXTREME RAINFALL EXTREME RAINFALL EVENTS EXTREME TEMPERATURES EXTREME WEATHER EXTREME WEATHER EVENTS FINANCIAL ANALYSIS FINANCIAL CAPACITY FINANCIAL CONSEQUENCES FINANCIAL COSTS FINANCIAL IMPACTS FINANCIAL INSTITUTIONS FINANCIAL INSTRUMENTS FINANCIAL PERFORMANCE FINANCIAL RETURNS FINANCIAL RISK FINANCIAL RISK MANAGEMENT FINANCIAL RISKS FINANCIAL SECTOR FLOODS FOREIGN EXCHANGE FOREST FOREST PLANTATION FOREST PLANTATIONS FORESTRY FORESTS FOSSIL FUEL FUTURE CLIMATE CHANGE FUTURE PRICES GREENHOUSE GREENHOUSE GAS GREENHOUSE GAS EMISSIONS GREENHOUSE GAS EMISSIONS SCENARIO GREENHOUSE GAS EMISSIONS SCENARIOS HEAVY RAINS HIGH TEMPERATURES HURRICANE HURRICANE FREQUENCY HURRICANE SEASON HURRICANES IMPACT OF CLIMATE IMPACT OF CLIMATE CHANGE IMPACTS OF CLIMATE CHANGE IMPACTS OF CLIMATE CONDITIONS IMPLICATIONS OF CLIMATE CHANGE IMPORTS INCOME INCREASE IN TEMPERATURE INFORMATION ON CLIMATE INSTITUTIONAL INVESTORS INSURANCE INSURANCE COMPANIES INSURANCE COSTS INSURANCE COVERAGE INSURANCE POLICIES INSURANCE PREMIUMS INTERGOVERNMENTAL PANEL ON CLIMATE CHANGE INVESTMENT DECISIONS INVESTMENT STRATEGIES IPCC JOBS LAND DEGRADATION LOST REVENUE LOW-CARBON MANAGING CLIMATE RISK METALS METEOROLOGY NATIONAL GRID NATURAL CLIMATE VARIABILITY NATURAL GAS NUCLEAR PLANTS OUTPUT DECLINES PERFORMANCE STANDARDS POLICY MAKERS POLLUTION PREVENTION PORTFOLIO POWER GENERATION POWER SUPPLY PRECIPITATION PRICE INDEX RAIN RAINFALL PATTERNS RAINFALL VARIABILITY RAINY SEASON REAL ESTATE RELATIVE HUMIDITY RENEWABLE ENERGY RENEWABLE ENERGY SOURCES RESPONSE TO CLIMATE CHANGE RETROFITTING REVENUE LOSS RISK MANAGEMENT RISKS OF CLIMATE CHANGE SCENARIOS SEA LEVEL RISE SEASONAL RAINFALL SENSITIVITY ANALYSES SILICON STEAM GENERATION SUMMER TEMPERATURES SURFACE TEMPERATURES TAX REVENUES TEMPERATURE TEMPERATURE CHANGES TEMPERATURE INCREASE TEMPERATURE INCREASES TEMPERATURE THRESHOLD TEMPERATURE THRESHOLDS TROPICAL CYCLONES TROPICAL STORMS UNCERTAINTIES UNEP WARMER TEMPERATURES WATER QUALITY WEATHER PATTERNS WORST-CASE
Online Access:	http://documents.worldbank.org/curated/en/219621468322763113/Climate-risk-and-financial-institutions-challenges-and-opportunities http://hdl.handle.net/10986/27888

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Summary:	This report analyzes in some detail the risks to project finance and the performance of real-sector investments. Options, futures, derivatives, foreign exchange and more exotic instruments are not specifically addressed. The objectives of institutional investors, such as pension funds, include creation of sustained revenues over a long period of time. Clearly, given this long-term perspective, institutional investors need to be particularly aware of growing risks to their investments in climatically sensitive sectors or regions. This report demonstrates that climate change and its impacts are likely to alter a number of conditions that are material to the objectives of financial institutions. If changing conditions are not actively managed, investments and institutions may underperform. Most investments will be channeled through financial institutions. Given that the main effects of climate change are now well established, there is a considerable opportunity, as well as a responsibility, for these institutions to take a leading role in adaptation to climate change. Institutions managing investments in long-lived assets have both a direct financial risk to consider and the opportunity to create value by working proactively with their clients and other stakeholders to take steps to manage the risks. Going forward, International Finance Corporation (IFC) will initiate the development of more general tools addressing climate risks and investments.

Climate Risk and Financial Institutions : Challenges and Opportunities

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