World's financial firms risk $1 trln in losses if slow to act on climate change -report

(Reuters, 21 Feb 2020) Oliver Wyman found that few firms in the financial services industry - including insurers and asset managers - were modelling climate risks at a granular level

By Iain Withers

LONDON, Feb 21 (Reuters) - The world's financial services sector risks losses of up to $1 trillion if it fails to respond quickly to climate change and is hit by policy shifts such as the introduction of a carbon tax, a new report shows.

The report by consultants Oliver Wyman, published on Friday, comes as pressure on the industry to accelerate efforts to help better allocate capital in the shift to a low-carbon economy ratchets up ahead of United Nations climate talks in November in Glasgow, Scotland.

Finance firms need to calculate and reduce their exposure to dirty industries such as oil and gas, the report said.

Amid concerns about the amount of potential climate-linked credit risk on lenders' balance sheets, banks in countries like Britain and France will also soon face climate stress tests on top of existing financial ones.

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Reuters, 21 Feb 2020: World's financial firms risk $1 trln in losses if slow to act on climate change -report