The IPCC Special Report finds that current policies are not sufficient to limit global warming to well below 1.5°C, and that the gap between the actions on the ground and the required changes in order to meet the global goal is widening rapidly. One reason is that scientific assessments based...

Existing approaches to assess the economic impact of climate policies tend to overlook the financial sector and to focus only on direct effects of policies on the specific institutional sector they target, neglecting possible feedbacks between sectors, thus, underestimating the overall policy...

The financial system, the ecosystem of investors (e.g., banks, investment funds, insurance), markets, and instruments, is often considered to play an enabling role in climate mitigation pathways to a low-carbon transition. But it can also have a hampering role, e.g., if investors’ perceptions...

Climate risk brings about a new type of financial risk that standard approaches to risk management are not adequate to handle. We develop a model that allows to compute the valuation adjustment of corporate and sovereign bonds conditioned to climate transition risk, based on available...

While there is a broad understanding that the financial system can play a major enabling role in achieving the low-carbon transition, it is not well understood under which specific conditions such an orderly transition scenario when finance works as an enabler could occur. Even more importantly,...

How financial investors may react to policy events related to sustainability and climate change mitigation in particular, is a key question with implications for sustainable finance and financial stability. We address this question by carrying out a multi-period difference-in-difference approach...