Climate Risks & Financial Institutions

Document summary

Climate change is set to have a dramatic economic impact. It is already altering the availability of and demand for resources, supply and demand for products and services, the performance of physical assets, and the need for innovation. Failure to consider climate change in investment strategies can undermine projected financial returns and affect the non-financial risk management of institutions, particularly on development, environmental, and social issues.As they channel investment, financial institutions have an opportunity and responsibility to take a leading role in mitigating and adapting to climate change. Institutions managing investments in long-term assets should consider the financial risks associated with climate change, as well as the opportunity to create value by working proactively with clients and stakeholders to manage the risks. IFC is supporting the efforts of several development and commercial financial institutions to take steps in this direction. This publication is part of IFC's work to help financial institutions analyse the risks associated with climate change.