imported>Doug Williamson |
imported>Doug Williamson |
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| ''Climate change - financial risks''.
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| The Bank of England defines climate transition risk as financial risks that could arise from adjusting to a lower-carbon economy. | | The fixed amount of periodic interest paid by a coupon bond over its life. |
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| Climate transition risks are distinct from the direct physical risks of climate change, such as more frequent and severe extreme weather events.
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| :<span style="color:#4B0082">'''''Climate transition risks and opportunities'''''</span>
| | Abbreviation for Coupon rate. |
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| :* Policy and legal changes including changes relating to energy generation, renewable energy targets, sustainable land use and water efficiency.
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| :* Technological advancements in renewable energy, battery storage and electrification of transport, aviation and agriculture.
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| :* Change in demand for products and commodities, including fossil fuels and lithium, leading to market risk.
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| :* Reputational risk arising from shareholder, consumer or investor concerns, reflecting the transition in views regarding fossil fuels.
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| :''Actuaries Institute of Australia Climate Change Working Group''
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| :<span style="color:#4B0082">'''''What are the climate transition risks?'''''</span>
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| :"Transition risks can occur when moving towards a less polluting, greener economy. Such transitions could mean that some sectors of the economy face big shifts in asset values or higher costs of doing business. It’s not that policies stemming from deals like the Paris Climate Agreement are bad for our economy – in fact, the risk of delaying action altogether would be far worse. Rather, it’s about the speed of transition to a greener economy – and how this affects certain sectors and financial stability.
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| :One example is energy companies. If government policies were to change in line with the Paris Agreement, then two thirds of the world’s known fossil fuel reserves could not be burned. This could lead to changes in the value of investments held by banks and insurance companies in sectors like coal, oil and gas.
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| :The move towards a greener economy could also impact companies that produce cars, ships and planes, or use a lot of energy to make raw materials like steel and cement."
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| :''Bank of England''
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| == See also == | | == See also == |
| * [[Bank of England]] | | * [[Accrued interest ]] |
| * [[Climate change]] | | * [[Asset-based swap]] |
| * [[Climate Disclosure Standards Board]]
| | * [[Average effective maturity]] |
| * [[Climate liability risk]]
| | * [[Average nominal maturity]] |
| * [[Climate physical risk]]
| | * [[Coupon bond]] |
| * [[Climate risk]]
| | * [[Coupon rate]] |
| * [[Climate transition]]
| | * [[Coupon strip]] |
| * [[COP26 Private Finance Hub]]
| | * [[Foreign currency bond]] |
| * [[Financial Conduct Authority]]
| | * [[Nominal yield]] |
| * [[Financial Stability Board]]
| | * [[Paying agent]] |
| * [[Fossil fuel]]
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| * [[G20]]
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| * [[Greenflation]]
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| * [[Greenhouse gas]]
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| * [[Listing Rules]]
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| * [[Market risk]]
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| * [[Paris Agreement]]
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| * [[Premium Listing]]
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| * [[Reputational risk]] | |
| * [[Stakeholder]] | |
| * [[Standard Setting Body]] | |
| * [[Stranded assets]] | |
| * [[Task Force on Climate-related Financial Disclosures]] | |
| * [[TCFD Recommendations]] | |
| * [[Transition]] | |
| * [[Transition finance]] | |
| * [[Transition risk]]
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| * [[World Economic Forum]]
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| == External link ==
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| * [https://www.bankofengland.co.uk/knowledgebank/climate-change-what-are-the-risks-to-financial-stability Climate change - What are the risks to financial stability? Bank of England]
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| [[Category:The_business_context]]
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| [[Category:Corporate_finance]]
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| [[Category:Compliance_and_audit]]
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| [[Category:Ethics]]
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| [[Category:Identify_and_assess_risks]]
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| [[Category:Manage_risks]]
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| [[Category:Risk_frameworks]]
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| [[Category:Risk_reporting]]
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| [[Category:Financial_products_and_markets]]
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