Aligning investments to the climate and sustainability targets requires the introduction of stable climate-aligned policies. In this regard, a global Carbon Tax (CT) and a revision of the microprudential banking framework via a Green Supporting Factor (GSF) have been advocated. However, our...

Market-based solutions to climate change are widely advocated by financial actors and policy-makers in order to foster a smooth transition to a low-carbon economy. A first important limiting factor to this approach is widely recognized to be the imperfect information on investors' portfolios'...

It is increasingly recognized that a transition to sustainable finance is crucial to scale up the low-carbon investments needed to achieve the global climate targets. A main barrier to portfolios' decarbonization is the lack of conclusive evidence on whether low-carbon investments add value to a...

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...

Climate change was recognized as a risk for ecosystems and the economy, and recently for the stability of the financial system. Tackling climate change requires urgent investments in the low-carbon energy transition. However, capital is not flowing at the pace and amount needed, exposing public...

The urgency of estimating the impact of climate risks on the financial system is increasingly recognized among scholars and practitioners. By adopting a network approach to financial dependencies, we look at how climate policy risk might propagate through the financial system. We develop a...