Financial institutions are increasingly considering climate-related factors as part of their investment and/or lending decisions. Broadly, there are two – often complementary – reasons for this: Reducing risk and/or maximising returns: Climate change will have macroeconomic and financial impacts, and therefore potentially impact financial asset values (eg Bank of England (2022), Network for Greening the Financial System (NGFS) (2023Opens in a new window), Bank of England (2022)). Financial risks are generally larger for longer maturity assets. The value of these assets could re-price in an orderly way over time in ... (full story)