The Climate Risk for Finance in Italy

Abstract

The increasing attention paid to the possible consequences of climate change for the financial sector has strengthened international cooperation on green finance, with initiatives from both the industry and the institutions. International surveys show that so far there has been no adequate growth in awareness of the risks linked to climate change and the opportunities linked to the transition towards a low carbon economy. Evidence acquired on Climate-Related Financial Risk (CRFR) disclosure in Italy has confirmed the same conclusions. We have therefore identified three steps with the aim of encouraging financial institutions to take CRFR into account in their corporate risk management strategies: 1) create a information hub to gather the information required for assessing the CRFR; 2) compile a list of the information not yet available; 3) define standard methodologies that allow the climate scenarios to be part of the decision-making processes of financial institutions.