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The concept of sustainability has developed significantly from an unrealistic abstract ideology to a framework that can measure companies' environment, society and corporate governance (ESG) performance. While extensive research has established some relational impacts of ESG performance on debt capital cost (DCC), this paper contends that a comprehensive review of these impacts is incomplete without screening them through the lens of climate risk (CR). Companies are subjected to CR that comprises physical and transition factors resulting from climate change. This paper aims to unravel the missing link between CR and ESG performance, and the consequent impacts on DCC. This paper illustrates using Chinese companies that operate in an emerging economy with robust industrial activities under intense global scrutiny to achieve emission reduction and meet carbon neutrality goals. Through considering CR, the impacts of ESG performance on DCC are explained using panel data and mediation effect tests with A-share listed enterprises on the Shanghai and Shenzhen stock exchanges from 2016 to 2020. The findings show that ESG performance significantly and negatively affects DCC, with debt default risk playing a mediating role. The negative effect of ESG performance on DCC is more significant in non-polluting enterprises and non-state-owned enterprises. [ABSTRACT FROM AUTHOR]

The quantitative analysis of the economic impact of climate risk is an effective means of understanding and taking reasonable preventative steps in relation to the climate-related economic crisis. This paper takes panel data from China's 31 provinces for 2009 to 2021, combined with a regulating intermediary effect model, to determine the climate risk faced in China and its influence mechanism on high-quality economic development, in an attempt to determine how to adjust the path. The results show that, first, when using a different regression model, we see that climate risks pose a significantly inhibiting effect on high-quality economic development in China. Secondly, when the climate risk increases by 1%, high-quality economic development drops by 0.0115%. When the climate risk increases by 1%, this leads to a 14.9672% increase in the likelihood of natural disasters, causing high-quality economic development to be indirectly reduced by 0.1300%. Thirdly, green innovation has a multidimensional effect; it can both directly and indirectly impact the negative effects of inhibition, and indirect adjustment has a greater effect than direct adjustment. Such regulation has a greater effect on the input than on the output. Therefore, we should seek to more accurately understand the dangers of climate risk, effectively improve the five aspects of development, and strengthen the input of green innovation and thus the output of high-quality economic development in China. [ABSTRACT FROM AUTHOR]

There is increasing pressure on organisations and countries to manage the financial risks associated with climate change. This paper summarises research on climate change, credit risk and the associated losses, and specifically identifies methods that could contribute to quantifying the causal relationships between climate change and credit risk. We conducted a bibliometric analysis using the Web of Science database to analyse 3138 documents that investigated climate change and credit risk. The key results reveal that climate change has a quantifiable effect on credit risk, and that the most affected industries or sectors are energy, transportation/mobility, agriculture and food, manufacturing, and construction. The prominent methods to quantify causal relationships between climate change and credit risk are regression models, but these are mostly used in preliminary and testing stages. Distance to default and credit risk are the main areas of focus when quantifying climate change and credit risk. Banks are the main type of organisation that have sought to quantify the causal relationship. We identify a research agenda to quantify these causal relationships. [ABSTRACT FROM AUTHOR]

In this paper, we test the impact of weather-related disasters on the individual firm's equity financing cost based on Chinese listed companies in the mining industry. We collect data from the China Meteorological Disaster Yearbook and CSMAR database. Using direct economic loss associated with extreme weather-related events to quantitate meteorological disasters and regression analysis, we find that weather-related disasters significantly increase a firm's equity financing cost. This result is robust compared to alternative measurements of equity financing cost, such as the two-way fixed effect model, severe disaster dummy variable, and instrumental variable regression. Further research shows that cash holdings and managerial ability can mitigate the impact of meteorological disasters on the equity financing cost. Our study provides significant implications for firms and policymakers. Firms and policymakers should carefully evaluate the risk of weather-related disasters. [ABSTRACT FROM AUTHOR]

The ability of farmers to acquire inputs through purchase from available markets empowers them with the autonomy and capacity to diversify inputs, consequently enhancing the resilience of their cropping activities to various shocks. This paper investigates whether climate shocks, particularly rainfall shocks, influence commercial input purchase decisions by smallholder farmers in contrasting geographic regions in Malawi, with a particular emphasis on fertilizer, agrochemicals, seed, and labor. The empirical approach integrates historical weather information, climate shock perceptions with a longitudinal household survey data set to model commercial input purchasing decisions using appropriate latent variable models. The findings suggest that exposure to recent rainfall shocks, especially droughts, stimulates commercial input purchasing across regions, especially in drier central and southern regions of Malawi. This result holds true for general input purchase decisions and for specific inputs such as agrochemicals, fertilizer, seed, and labor. Although drought shocks considerably increase the probability of acquiring inputs through purchase, they occasionally diminish the intensity of purchases. Both objective and subjective measures of lagged rainfall shocks are revealed as significant determinants of commercial input purchases across regions in Malawi. In addition to regional heterogeneity findings, further analysis shows that the relatively wealthier, male-headed families and those with access to information are more likely to invest in purchased inputs in response to drought shocks. Scaling up policies that remove demand- and supply-side barriers to smallholder farmers' access to commercial inputs from available markets is necessary for adaptation to rainfall shocks. [ABSTRACT FROM AUTHOR]

Climate risks are increasingly shaping corporate strategies, raising important considerations for sustainability. This study explores the impact of climate risks on the shadow banking activities of non-financial firms, examining how these risks influence sustainable financial practices. Analyzing a sample of Chinese listed firms from 2010 to 2022, this study finds that climate risks are negatively associated with shadow banking activities, reflecting a shift towards more sustainable financial management. This finding remains robust through various robustness checks and tests for endogeneity. Heterogeneity results indicate that the reduction in shadow activities due to climate risks is more pronounced in firms with higher dependence on external financing and weaker profitability. Mechanism results suggest that climate risks amplify cross-sectional risks for firms, increasing risk sources. Simultaneously, companies enhance their preference for holding cash to address potential risks. The combined effect of these factors leads to a decrease in shadow banking activities among non-financial firms, aligning with a shift towards sustainability. This study provides new insights into understanding how climate risks drive sustainable financial decision-making and enriches the research on the determinants of firm financialization. [ABSTRACT FROM AUTHOR]

Climatic conditions are the main factor influencing the suitability of agricultural land for crop production. Therefore, the evaluation of climate change impact on crop suitability using the best possible methods and data is needed for successful agricultural climate change adaptation. This study presents the application of a multi-criteria evaluation approach to assess climate suitability for maize production in Poland, for a baseline period (BL, 1981–2010) and two future periods 2041–2070 (2050s) and 2071–2100 (2080s) under two RCP (Representative Concentration Pathways) scenarios: RCP4.5 and RCP8.5. The analyses incorporated expert knowledge using the Analytical Hierarchy Process (AHP) into the evaluation of criteria weights. The results showed that maturity and frost stress were the most limiting factors in assessing the climatic suitability of maize cultivation in Poland, with 30% and 11% of Poland classified as marginally suitable or not suitable for maize cultivation, respectively. In the future climate, the area limited by maturity and frost stress factors is projected to decrease, while the area of water stress and heat stress is projected to increase. For 2050 climate projections, water stress limitation areas occupy 7% and 8% of Poland for RCP4.5 and RCP8.5, respectively, while for 2080 projections, the same areas occupy 12% and 32% of the country, respectively. By 2080, heat stress will become a limiting factor for maize cultivation; according to our analysis, 3% of the Polish area under RCP8.5 will be marginally suitable for maize cultivation because of heat stress. The overall analyses showed that most of Poland in the BL climate is in the high suitability class (62%) and 38% is moderately suitable for maize cultivation. This situation will improves until 2050, but will worsen in the 2080s under the RCP8.5 scenario. Under RCP8.5, by the end of the century (2080s), the highly suitable area will decrease to 47% and the moderately suitable area will increase to 53%. [ABSTRACT FROM AUTHOR]

Cities worldwide are facing varying degrees of ongoing threats closely tied to climate change. Research is emerging that addresses climate risks as a pressing issue, especially for vulnerable cities in the Global South; however, there is a significant lack of systematic and application-oriented research on ecosystem-based adaptation to urban climate change. This study uses Shenyang in Northeast China as a case study, employing multisource data and integrated methods to examine and depict the dynamics of urban ecosystem-based adaptation to climate change amid rapid urbanization. The results indicate a decline in capacity for climate change adaptation during the study period. A framework for mainstreaming ecosystem-based adaptation is proposed, identifying specific strategies for climate change mitigation and adaptation in urban policy and planning processes in Shenyang. It also has significance for other cities to draw lessons from. By linking urban ecosystem dynamics, the capacity for urban climate adaptation, and sustainable urban governance, this study bridges the gap between research and practice in urban climate change adaptation, and expands the contribution of geography-based interdisciplinary integration to urban resilience. More practically, it provides references for Shenyang in adapting to climate change and transitioning to sustainable development. [ABSTRACT FROM AUTHOR]

In 2012, the Intergovernmental Panel on Climate Change (IPCC) moved from a vulnerability to a risk-based conception of climate change adaptation. However, there are few examples of work that translates this approach into climate change adaptation practice, in order to demonstrate the practical utility of following a risk-based approach to adapting to climate change. The paper explores critically the differing conceptions of vulnerability and risk across the literature relating to disaster risk management and climate change adaptation. The paper also examines a selection of spatially focused climate change vulnerability and risk assessment methodologies in this context. In doing so, we identify issues with the availability of spatial data to enable spatial risk-based climate change assessments. We argue that the concept of risk is potentially favorable in helping cities to understand the challenges posed by climate change, identify adaptation options, and build resilience to the changing climate. However, we suggest that change is needed in the way that practitioners and policymakers engage with risk-based concepts if they are to be embed into climate change adaptation activities. [ABSTRACT FROM AUTHOR]

In 1972, The Limits to Growth, using the World3 System Dynamics model, modeled for the first time the long-term risk of food security, which would emerge from the complex relation between capital and population growth within the limits of the planet. In this paper, we present a novel system dynamics model to explore the short-term dynamics of the food and energy system within the wider global economic framework. By merging structures of the World3, Money, and Macroeconomy Dynamics (MMD) and the Energy Transition and the Economy (ETE) models, we present a closed system global economy model, where growth is driven by population growth and government debt. The agricultural sector is a general disequilibrium productive sector grounded on World3, where capital investment and land development decisions are made to meet population food need, thus generating cascade demands for the energy and capital sector. Energy and Capital Sectors employ a more standard economic approach in line with MMD and ETE. By taking into account the role of financial, real, and natural capital, the model can be used to explore alternative scenarios driven by uncertainty and risk, such as climate extreme events and their impacts on food production. The paper presents scenario analysis of the impact of an exogenous price, production, and subsidies shock in the food and/or energy dimensions on the economic system, understanding the sources of potential cascade effects, thus providing a systemic risk assessment tool to inform global food security policies. [ABSTRACT FROM AUTHOR]

The objective of this paper is to model and study the impact of high temperature on mortality in Pakistan. For this purpose, we have used mortality and climate data consisting of maximum temperature, variation in monthly temperature, average rainfall, humidity, dewpoint, as well as average air pressure in the country over the period from 2000 to 2019. We have used the Generalized Linear Model with Quasi-Poisson link function to model the number of deaths in the country and to assess the impact of maximum temperature on mortality. We have found that the maximum temperature in the country has a significant impact on mortality. The number of deaths in Pakistan increases as the maximum temperature increases. We found that, as the maximum temperature increase beyond 30 °C, mortality increases significantly. Our results indicate that mortality increases by 27% when the maximum temperature in the country increases from medium category to a very high level. Similarly, the number of deaths in the country increases by 11% when the temperature increases from medium temperature to high level. Furthermore, our study found that when the maximum temperature in the country decreases from a medium level to a low level, the number of deaths in the country decreases by 23%. This study does not consider the impact of other factors on mortality, such as age, medical conditions, gender, geographical location, as well as variability of temperature across the country. [ABSTRACT FROM AUTHOR]

Global climate change represents a grand challenge for society, one that is increasingly influencing tourism sector investment, planning, operations, and demand. The paper provides an overview of the core challenges climate change poses to sustainable tourism, key knowledge gaps, and the state of preparedness in the tourism sector. As we begin what is widely considered a decisive climate decade, low sectoral preparedness should be highly disconcerting for the tourism community. Put bluntly, what we have done for the past 30 years has not prepared the sector for the next 30 years of accelerating climate change impacts and the transformation to a decarbonized global economy. The transition from two decades of awareness raising and ambition setting to a decade of determined collective response has massive knowledge requirements and necessitates broad sectoral commitments to: (1) improved communications and knowledge mobilization, (2) increased research capacity and interdisciplinary collaboration, and (3) strategic policy and planning engagement. We in the tourism and sustainability communities must answer this clarion call to shape the future of tourism in a decarbonized and post +3 °C world, for there can be no sustainable tourism if we fail on climate change. [ABSTRACT FROM AUTHOR]

Collaborative actions between citizens and government agencies at the local level have the potential to raise community resilience to climate risks via social learning and increased social capital. However, for these actions to succeed, community members' values, norms and risk perceptions must support collaborative action and be accompanied by self-efficacy. This paper develops a theoretical framework linking these concepts and applies the framework to a collaborative climate risk project in Singapore, using qualitative data from focus group discussions. We find that pro-social values are a strong enabling factor for residents to engage in collaboration, but that perceptions of low collective efficacy are a potential barrier. In particular, we find that the relative competence of the government leads to a perception of "exemptionalism," which undermines individuals' intentions to devote resources to collaborative action. [ABSTRACT FROM AUTHOR]

In Pakistan, research on information and communication technologies-based agricultural information services (ICTbAIS) have gained significant attention owing to the overwhelming population of smallholder farmers (whose information needs are unable to be met by the conventional extension services) and the increasing incidence of climatic risk. This study is, therefore, conducted in the Punjab province of Pakistan (mixed cropping region) to explore farmers' use of ICTbAIS and understand the relationship between farmers' socio-economic attributes, risk perception, and choices of ICTbAIS. A sample of 480 farmers was drawn using a multistage sampling approach, and farmers were interviewed face-to-face. To analyze the dataset, a multivariate Probit (MVP) model was employed. The results show that Television (TV) and mobile-based advisory and mobile-based consultations appeared to be the most used ICTbAIS, followed by radio and internet-based advisory. The estimates of the MVP model showed that farmers' age, education, farmland, tenancy status, off-farm income, and climate risk perception are significant determinants of their choices of ICTbAIS. Based on our results, we suggest policymakers and extension agencies to improve the content of ICTbAIS and make efforts for the awareness and training of farmers regarding the use of contemporary ICTs. [ABSTRACT FROM AUTHOR]

The impact of climate change and related hazards such as floods, heatwaves, and sea level rise on human lives, cities, and their hinterlands depends not only on the nature of the hazard, but also on urban development, adaptation, and other socioeconomic processes that determine vulnerability and exposure. Spatial planning can reduce climate risk not just by influencing the exposure, but also by addressing social vulnerability. This requires that relevant information is available to planners and that plans are implemented and coordinated between sectors. This article is based on a research project in Thailand, particularly on the results of multi-sectoral workshops in the case study region of the Andaman Coast in southern Thailand, and draws upon climate risk, spatial planning, and systems thinking discourses. The article formulates recommendations for planning in the context of Thailand that are relevant for other rapidly growing and urbanizing regions. Among other conclusions, it suggests that systems thinking approaches and cross-sectoral strategies are ways to grasp the interdependencies between and within climate risk and spatial development challenges. [ABSTRACT FROM AUTHOR]

Businesses, investors, and insurers are requiring better quantitative assessments of their exposure to climate risks and their impact on climate change. They are incorporating these assessments in their day-to-day management and long-term investment decisions. Already, there are efforts to develop international guidelines, common policies and legal frameworks for such assessments, as well as the desire to foster climate financing. We examine recent progress in East Asia and the rest of the world in setting targets, pricing policies, and other mechanisms to reduce climate risks. We develop a model that demonstrates how reduced climate risk management may lower the total cost of capital of firms, thus making them more attractive to investors. We discuss the additional policies needed to support improved climate risk management in investment decisions, private investments in climate science, technology and innovation (STI) expansion, and more widespread adoption of climate financing and principles. Central banks, financial authorities, and governments can advance this objective by creating financial incentives to support investment decision-making. This would take into account factors such as improving climate performance, establishing better climate risk management and reporting requirements to foster green STI, and developing international guidelines and common policy and legal frameworks to support better climate risk management, assessments and reporting. [ABSTRACT FROM AUTHOR]

The Intergovernmental Panel on Climate Change 2013 report claims that climate change from human-induced greenhouse gas emissions will cause increasing temperatures in many regions and various detrimental effects such as rising sea levels, ecosystem changes, droughts, and floods. This study proposes a method for assessing the climate risks resulting from climate change as well as a tool that companies can use to assess those risks. The method for assessing climate risk is proposed in accordance with the ISO 31000 risk management process. We then design a web-based tool to implement the climate change risk assessment process. The data the tool generates enable companies to identify and analyze their climate risks to reduce potentially negative future financial impacts. The data on potential damage costs indicate that climate change is no longer an environmental issue but rather an economic one for companies, and the results presented through the proposed assessment method can be used to establish countermeasures and sustainable planning at companies. The results of this research are significant in that they provide companies with the critical information needed to improve their planning and response to climate risk. [ABSTRACT FROM AUTHOR]

The Regional Organization for the Protection of the Marine Environment (ROPME) Sea Area (RSA) in the northern Indian Ocean, which comprises the Gulf, the Gulf of Oman and the northern Arabian Sea, already experiences naturally extreme environmental conditions and incorporates one of the world's warmest seas. There is growing evidence that climate change is already affecting the environmental conditions of the RSA, in areas including sea temperature, salinity, dissolved oxygen, pH, and sea level, which are set to continue changing over time. The cumulative impacts of these changes on coastal and marine ecosystems and dependent societies are less well documented, but are likely to be significant, especially in the context of other human stressors. This review represents the first regional synthesis of observed and predicted climate change impacts on marine and coastal ecosystems across the ROPME Sea Area and their implications for dependent societies. Climate-driven ecological changes include loss of coral reefs due to bleaching and the decline of fish populations, while socio-economic impacts include physical impacts from sea-level rise and cyclones, risk to commercial wild capture fisheries, disruption to desalination systems and loss of tourism. The compilation of this review is aimed to support the development of targeted adaptation actions and to direct future research within the RSA. [ABSTRACT FROM AUTHOR]

We use the COVID-19 pandemic period in 2020 as an exogenous shock event to assess in how far climate risks measured by carbon exposure have entered and established themselves in the valuation of global stocks. In addition to descriptive analyses, we conduct cross-sectional panel regressions to assess the influence of carbon intensity levels on return and risk characteristics during and after the shock period. Furthermore, a difference-in-differences model setup allows us to infer whether these influences were significantly different when comparing pre-shock, shock, and post-shock periods. We find that carbon intensity affected returns significantly and negatively during a time of high uncertainty. In fact, high-emitting stocks suffered significantly more compared to the pre-crisis period. However, they could make up for their additional losses in the recovery period. In line with their high-risk exposure towards stranded assets and climate policy uncertainty, carbon-intensive stocks face higher risk levels in more stable economic times, thus justifying a carbon premium. [ABSTRACT FROM AUTHOR]

Climate change is an evolving business reality influencing the sustainability of ski tourism worldwide. A new integrated model of the co-evolution of supply (27 ski areas) and demand-side (skier behaviour) climate change adaptation in the ski tourism market of Ontario, Canada is presented. Ski area operations are modeled under a high-emission 2050s scenario, with skier responses to altered operations informed by a survey of 2429 skiers. These market adaptive dynamics reveal new insights into differential climate risk, capturing patterns not apparent when considering only operational conditions of ski resorts. A decoupling of ski season length and skier visitation was found at four ski areas, where, despite average season length losses, visitation increased as a result of reduced competition. Simulated skier visit losses were smaller than reductions in season length, contributing to an increase in crowding. Growing the market of skiers was also identified as a critical adaptation strategy that could offset skier visit losses from shortened seasons. Climate change challenges the future sustainability of ski areas in this market in several ways: profitability of ski areas with substantially shorter seasons, increased snowmaking costs, crowding impacts on visitor experience, and potential overtourism at the few most climate resilient destinations. [ABSTRACT FROM AUTHOR]

This article reviews emerging regulatory and supervisory practices with respect to prudential risks from climate change in the banking sector. It evaluates the theoretical considerations with respect to climate-related financial risks in the banking sector, reviews the related academic literature, and analyzes the policy-related publications from various regulatory authorities. As a result of this assessment, the article concludes that the major regulatory and supervisory expectations can be categorized into four key areas: (i) board-level attention to climate risks and integrating them into internal governance frameworks, (ii) embedding climate risks into strategies and overall risk management frameworks, (iii) identifying climate-related material exposures and disclosure of relevant key metrics, and (iv) assessing capital impact from climate risk through scenario analysis and stress testing. The article also presents a number of implications for banks and banking regulators in other jurisdictions to help them identify the actions required to address climate change risks in the banking sector. [ABSTRACT FROM AUTHOR]

In the current context of fast innovation in the field of urban resilience against extreme weather events, it is becoming more challenging for decision-makers to recognize the most beneficial adaptation measures for their cities. Detailed assessment of multiple measures is resource-consuming and requires specific expertise, which is not always available. To tackle these issues, in the context of the H2020 project RESCCUE (RESilience to cope with Climate Change in Urban arEas), a methodology to effectively prioritize adaptation measures against extreme rainfall-related hazards in urban areas has been developed. It follows a multi-phase structure to progressively narrow down the list of potential measures. It begins using less resource-intensive techniques, to finally focus on the in-depth analysis on a narrower selection of measures. It involves evaluation of risks, costs, and welfare impacts, with strong focus on stakeholders' participation through the entire process. The methodology is adaptable to different contexts and objectives and has been tested in two case studies across Europe, namely Barcelona and Bristol. [ABSTRACT FROM AUTHOR]