Financial firms and climate risk assessment

McGrath, Callum, Fraser of Allander Institute (2021) Financial firms and climate risk assessment. Fraser of Allander Economic Commentary, 45 (3). ISSN 2046-5378

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2021 has been characterised by, among other things, headline-grabbing heat waves, wildfires, and flooding, as well as the UN Climate Change Conference due to take place in Glasgow this October and November. As physical risks are increasingly realised each year and talk from governments on addressing climate change takes a more dire tone, the financial sector is being encouraged to adopt measures to mitigate against these risks. This article briefly discusses the issues faced by the financial sector and central banks with regard to the risks associated with climate change.