The UN Environment Programme Finance Initiative and the UK-based National Institute of Economic and Social Research think-tank have published a report outlining short-term scenarios that could threaten the financial system. The analysis is entitled “Economic impacts of climate change: exploring short-term climate-related shocks for financial actors with macroeconomic models”, and around 50 major financial institutions participated in the study.
The report states: “Climate-related risks are too often considered long-term risks by financial actors. However, near-term impacts are becoming ever harder to ignore. Near-term transition risks can also create systemic instability as many incumbent industries, such as fossil fuels, will face existential changes. New climate policies and shifting consumer preferences have the potential to rapidly upend current business models.”