Sustainability and Financial Risks: The Impact of Climate Change, Environmental Degradation and Social Inequality on Financial Markets

ISBN-13: 9783030545291 / Angielski / Twarda / 2020 / 143 str.

Marco Migliorelli; Philippe Dessertine

Spis treści

1. An Overview of the Sustainability-Financial Risk Nexus

1.1 The Role of Finance in Fostering Sustainability: A Literature Review

1.2 Sustainability-related Risks and Possible Channels of Transmission into the Financial Markets

1.3 Physical Risk, Transaction Risk and Liability Risk

1.4 Distressed Commodity Markets and Financial Markets

1.5 The Potential Role of Social Inequality

1.6 Pricing the Risks and Market Failures

2. The Impact of Climate Change on the Banking and Insurance Industries

2.1 Impacts on the Insurance Industry

2.2 Impacts on the Banking Industry

2.3 The Problem of Measuring Exposure to Sustainability-related Risks

3. The Transition to a Low-carbon Economy and Stranded Assets

3.1 Definition of Stranded Assets

3.2 Uncertainties on the Definition of 'Sustainable'Activities

3.3 Policy Decisions and the Value of Productive Assets

3.4 Management of Stranded Assets

4. Sustainability-related Risks, Risk Management Frameworks and Financial Disclosure

4.1 The Need for Forward-thinking Frameworks in Risk Management

4.2 Potential Approaches to Account for Sustainability-related Risks

4.3 Disclosure of Sustainable Activities and Related Risks

4.4 The Role of Corporate Governance in Managing Sustainability-related Risks

5. Potential Solutions for Tackling the Sustainability-Financial Risk Nexus

5.1 Rating Systems and Sustainability-related Risks

5.2 Sustainable Assets and Prudential Regulation Requirements

5.3 Carbon Budgets

5.4 Disclosure on the Carbon Intensity of Different Assets

5.5 Sustainable Finance and Mitigation of Sustainability-related Risks: Where We Stand

6. Sustainability-related Risks and Financial Stability: A Systemic View and Preliminary Conclusions.

6.1 The Increasingly Important Impact of Sustainability on Financial Stability

6.2 Key Policy Implications

6.3 A New Role for Central Banks?

O autorze

Marco Migliorelli is an economist at the European Commission and an associate researcher at IAE Paris (Sorbonne Business School), University Paris 1 Panthéon-Sorbonne, France. His research focuses primarily on green and sustainable finance, cooperative banking and financial instruments innovation.

Philippe Dessertine is a full professor of finance at IAE Paris (Sorbonne Business School), University Paris 1 Panthéon-Sorbonne, France. He is also the director of the Institut de Haute Finance in Paris and a former member of the Haut Conseil des Finances Publiques in France. Additionally, he is the author of several publications on the role of finance in modern society.

Blurb

Despite growing discussions on the relationship between sustainability and finance, so far little attention has been given to the relation linking sustainability-related risks and financial risks. Climate change, environmental degradation and social inequality, among others factors, may indeed have considerable adverse impacts on financial actors and markets, and even have the potential to harm financial stability. Shedding light on the importance of the nexus between sustainability and financial risks, this book addresses the need for new industry and policy approaches. With insights from a skilled set of scholars in the finance field, this edited collection explores the effects of climate risks on the banking and insurance industries, the problem of stranded assets, the possible corporate risk management frameworks that could be used to control sustainability-related risks, the role of non-financial disclosure in fostering market discipline, and the policy actions needed to integrate sustainability considerations into prudential supervision. Tackling an interdisciplinary topic, this book will appeal to academics and practitioners within the finance, business and sustainability fields.