Disclosure of Bank Fossil Fuel Exposures

Climate change is set to dramatically impact both financial markets and the wider economy. Most immediate risks that stem from climate change, relate to the risk of physical changes such as extreme weather events or alteration of climate patterns and the implied risk of economic impact and damages f...

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Bibliographic Details
Published inEuropean economy (Roma) no. 2; pp. 89 - 103
Main Authors Beyene, Winta, Delis, Manthos, Ongena, Steven
Format Journal Article
LanguageEnglish
Published Rome Europeye srl 01.01.2021
Subjects
Bank reserves
Bond markets
Carbon
Central banks
Climate change
Coal
Emissions
Environmental policy
Financial disclosure
Fossil fuels
Global warming
Greenhouse gases
Information sources
Natural gas reserves
Paris Agreement
Regulation of financial institutions
Securities markets
Stranded investment
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Summary:Climate change is set to dramatically impact both financial markets and the wider economy. Most immediate risks that stem from climate change, relate to the risk of physical changes such as extreme weather events or alteration of climate patterns and the implied risk of economic impact and damages from such events. However, the impact of the transition to a low carbon economy manifests itself also in an alteration of the financial viability of a part of the capital stock and business models, particularly impacted are fossil-fuel companies and other high-carbon projects. To meet the Paris Agreement goal to limit global warming to 2C or less, a major fraction of existing world fossil fuel reserves must go unburned (McGlade and Ekins, 2015). They calculate that globally, a third of oil reserves, half of gas reserves and over 80% of current coal reserves should remain unused from 2010 to 2050 in order to meet the target of 2C.
ISSN:2421-6917
2421-6917