Module 4: climate Risk Measurement & Management solutions

Module 4: climate Risk Measurement & Management solutions What causes stranded assets? To meet the Paris agreement 70 percent of fossil fuels are unburnable which will cost the industry around 30 trillion. This will cause the repricjng of assets. The effects will be worse in a too late too sudden scenario. Causes financial instability through the following: Bottom up contagion - quic reprcing of asseTs has a cascading effect across industry Capital flight - natural catastrophes destroy capital reducing capital flows How to reduce exposure to a stranded asset? Decarbonisation by screening. Divestment by selling off shares and debts to non green aligned projects. Low carbon indices can be used to track divestment progress