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Commodities are usually used to diversify portfolios. However, their prices are affected by uncertain phenomena such as economic crises, political events, climate risk, etc. This paper examines how Climate and Economic Policy Uncertainty (measured by the CPU and GEPU indices, respectively) affect to wheat prices in the spot and future markets. By combining the wavelet transform and coherence analysis it is possible to see, graphically, the relationship between two time series and also to analyze it at different time frequencies. Although wheat spot and future prices have a similar behavior, the main results obtained in this paper show that the relationships between CPU and GEPU with future prices are stronger than with spot prices. Furthermore, futures and CPU exhibit synchronous movements, whereas futures and GEPU demonstrate antiphase behavior. However, in both cases (futures and spots) their relationship with CPU/GEPU is bounded to several time periods and some frequencies. [ABSTRACT FROM AUTHOR]

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]

Among the largest economies of the world, the EU not only has set the most ambitious and legally binding objectives for the reduction of the GHG emissions but also it has accompanied these objectives with a "state of the art" regulatory framework in the realms of investor protection and safety and soundness. Our paper focuses on the bank financing channel and highlights regulatory areas for improvement. To mobilize the necessary funds worldwide, a degree of interoperability of regional taxonomies is required, which calls for international cross-pollination and coordination to mitigate financial risks and the risk of harmful market fragmentation (BCBS 2022, FSB 2022). Also, the full interoperability between the international and the EU corporate reporting standards is a desirable objective. A building bloc methodological approach would make such interoperability easier having the sustainability impact perspective of the "double materiality objective" as an additional layer of the international requirements well understood to all investors in EU undertakings. As per the inclusion of climate risks in prudential regulation, it is completed for Pillar 3 disclosures relating effectively with the EU Taxonomy. Climate risk's long-term horizon still needs to be implemented in Pillar 2 by linking bank transition plans with stress testing based on climate risk scenario analysis covering both transition and physical risk. The inclusion of climate risks in Pillar 1 faces challenges similar to those of supervisors internationally. Fostering global ambition is an explicit objective of the EU. Its leadership on the realms of investor protection and prudential regulation of climate risks should ideally inform international cooperation and impregnate international standards. This will secure that investments for the fulfillment of the EU climate objectives will flow from in and outside the EU. [ABSTRACT FROM AUTHOR]

Objectives: The issues of environmental protection, including stopping the degrading climate change, are currently a subject of particular interest of the scientific community, policymakers, practitioners, but also all people around the world. Banking institutions, as a giver of capital, play a special role in financing climate protection activities. On the other hand, they are particularly exposed to climate risk, identified with the probability that extreme natural hazards may cause adverse effects, including the loss of people’s lives, their property or other economic assets, which became the main research topic in the article. The main purpose of the paper is climate risk exegesis and to analyze the degree of climate risk inclusion in the bank risk management process in the case of the Polish banking sector. The conducted empirical research verified the research hypothesis stating that the Polish banking sector is becoming more and more oriented towards the climate risk among the bank risk management systems. Material and methods: The following research methods were used in the paper: survey questionnaire method, case study analysis, observation method and synthesis method. The research procedure included two stages of questionnaire research, followed by the analysis and evaluation of the obtained results. Results: It has been shown that the Polish banking sector defines its climate goals and is increasingly sensitive to the climate risk management, including them in its risk management systems. It also assesses exposure to climate risk in terms of physical and transitional risk. Conclusions: The research and results presented in this study are important in building political awareness as well as public, social and economic activities in the field of counteracting climate threats. However, banks’ awareness is very important for financing projects that reduce degrading impact on climate. [ABSTRACT FROM AUTHOR]

This paper adapts the methodology developed by de Oliveira Campino et al. (June 2021) to account for predicted climate risk shocks' impact on a sovereign portfolio's credit quality on a forward-looking basis and in probabilistic terms. In particular, the portfolio stress testing capability is enhanced by adjusting the severity of the credit shocks to account for climate risk-related events on an additive basis. The benefit to risk managers is that it allows understanding of the impact of climate risk in marginal terms in relation to the original credit shock. The recently created NGFS (the Network for Greening the Financial System) database makes this exercise possible. Moreover, the described approach translates the marginal impact of climate risk scenarios on the portfolio's credit risk stress testing into capital adequacy metrics dislocations, which facilitates communicating the marginal impact of climate risk scenarios as capital consumption amounts. The paper presents an overview of the underlying model, and the methodological approach developed to adapt the credit risk stress-testing capabilities to account for climate risk using the NGFS database. Moreover, it applies the methodology to a hypothetical sovereign loan portfolio and discusses the results. Over the period considered, the study finds that the transition aspect of climate risk has a more pronounced marginal impact on a sovereign portfolio's credit risk than the chronic physical aspect of climate risk. Moreover, the results indicate that as the world takes action to transition away from carbon, the credit risk of sovereign portfolios may be exacerbated, especially if there are delays and a lack of coordination across countries and sectors. [ABSTRACT FROM AUTHOR]

In recent years, risk has been increasingly a long-term environmental problem that cannot be underestimated due to its tremendous impacts on various sectors including banking sector. Accordingly, the credit supply to private and public sectors is affected by the increased climate risk. In order to examine the climate risk effect from an international comparison, this paper empirically investigates the impact of climate risk on credit supply by using a sample of 174 countries during 2000–2019 from the perspective of the difference between private and public sectors. The results show that climate risk has a significant negative effect on the credit supply to private sector and a positive effect on that to the public sector. Further, we provide new evidence that the climate risk effect has a more significant effect on the private and public sector credit supply in the high-income countries than that in the low-income countries, suggesting a quick risk contagion in the high-income countries. [ABSTRACT FROM AUTHOR]

Europe accounts for 51% of international tourist arrivals and the tourism industry provides about 10% of workplaces in Europe. Tourism will be impacted by climate change in a diverse number of ways. At the same time, tourism is also a significant contributor of greenhouse gas emissions. The aim of this article is, therefore, to provide an assessment of climate and carbon risks for the European tourism industry based on a systematic literature review. Climate risk is the dominant category with 313 papers (74%), while 110 papers (26%) were on carbon risks. The following gaps were identified: geographical gaps, especially in countries of the former Soviet Union and former Yugoslavia; a lack of coherent studies on national tourism's and its sub-sectors' emissions; research addressing how climate policies might affect tourism demand; assessments of the integrated carbon and climate risks; lack of evidence on the link between tourism climate indicators and tourism demand; lack of climate change and tourism studies addressing policy and institutional tools for adaptation and implementation of adaptation measures in destinations; and research on rising sea levels and coastal erosion and its impacts on tourism destinations and demand. [ABSTRACT FROM AUTHOR]

An important component of the risks from climate change arises from outcomes that are very unlikely, but whose impacts if they were to occur would be extremely severe. Examples include levels of surface warming, or changes in the water cycle, that are at the extreme of plausible ranges, or crossing of a climate system "tipping point" such as ice sheet or ocean circulation instability. If such changes were to occur their impacts on infrastructure or ecosystems may exceed existing plans for adaptation. The traditional approach of ensemble climate change projections is not well suited to managing these High Impact‐Low Likelihood (HILL) risks, where the objective is to "prepare for the worst" rather than to "plan for what's likely." In this paper we draw together a number of ideas from recent literature, to classify four types of HILL climate outcome and to propose the development of a practical "toolkit" of physical climate information that can be used in future to inform HILL risk management. The toolkit consists of several elements that would need to be developed for each plausible HILL climate outcome, then deployed individually to develop targeted HILL risk management approaches for individual sectors. We argue that development of the HILL toolkit should be an important focus for physical climate research over the coming decade, and that the time is right for a focused assessment of HILL risks by the Intergovernmental Panel on Climate Change in its 7th Assessment Cycle. Plain Language Summary: To prepare for the risks that arise from climate change (and avoid them where possible), it is important to understand how climate is likely to change in future, and what the impacts are likely to be. Over many years, climate science has developed sophisticated climate projections to estimate these likely impacts, and these are widely used to plan how people and societies will need to adapt to climate change. However it is also important to understand possibilities that are unlikely, but would have even more severe impacts if they did occur—for example, global warming levels at the high end of plausible estimates, or crossing a "tipping point" for major changes in ice sheets or ocean currents. A different type of information is needed to plan for these risks. In this paper we propose a new set of climate information "tools" to respond to these high‐impact risks. The tools include plausible scenarios of extreme outcomes, and early warning systems to detect if they are on the horizon. Combining these new tools with existing climate projections will allow society to understand more fully the risks of climate change, and to plan for the likely effects while preparing for the worst. Key Points: Climate outcomes or events that have a high impact are a key component of climate risk, even if their likelihood is lowTraditional climate projections are of limited use to inform management of high impact‐low likelihood risksPhysical climate science needs an increased focus on storylines, early warning and monitoring to inform management of high impact risks [ABSTRACT FROM AUTHOR]

This paper investigates the impact of transition risk on a firm's low-carbon production. As the world is facing global climate change, the Intergovernmental Panel on Climate Change (IPCC) has set the idealized carbon-neutral scenario around 2050. In the meantime, many carbon reduction scenarios, known as Shared Socioeconomic Pathways (SSPs) have been proposed in the literature for different production sectors in a more comprehensive socio-economic context. We consider, on the one hand, a firm that aims to optimize its emission level under the double objectives of maximizing its production profit and respecting the emission mitigation scenarios. Solving the penalized optimization problem provides the optimal emission according to a given SSP benchmark. On the other hand, such transitions affect the firm's credit risk. We model the default time by using the structural default approach. We are particularly concerned with how, by following different SSPs scenarios, the adopted strategies may influence the firm's default probability. [ABSTRACT FROM AUTHOR]

Climate hazards have only fairly recently been acknowledged as key risk factors for airports. While there is a growing body of research examining specific climate change impacts, there is only limited work that combines this literature with overall climate risk. This paper seeks to address this gap in the literature by investigating and synthesising findings from studies relating to historical airport sensitivity to climate hazards and offering insights on the overall climate risk for the global airport system. With airports increasingly needing to become more "climate-resilient" due to projected changes in global climate, airport planners and decision-makers face challenges in terms of identifying key priority areas for resilience planning and investment. The findings of the paper provide insights into these challenges by examining best-applied practices and current levels of vulnerability. The paper supports the wider inclusion of climate risks as a key factor in airports' planning and operational processes. This will require transforming current management cultures to enhance an airport's operational ability to respond to climate events efficiently and recover quickly in the event of a disruption. [ABSTRACT FROM AUTHOR]

Environmental, social and governance (ESG) integration into active and passive portfolios is now a key part of the fast-growing area of sustainable investing. As portfolio managers integrate ESG into their strategies, they add new components of risk that are in addition to the traditional financial risks familiar to chief investment officers (CIOs) and risk managers. In this paper, the author reviews ESG risks from the practitioner's point of view, including risks found in ESG data itself that stem from the definition, collection and aggregation process. The author then discusses the portfolio characteristics associated with integrating ESG data as well as the challenges in building tools to measure risk and report on attribution. Next, he looks at connections between screening and reputational risks and the beneficial role that engagement can play. Finally, he discusses tail risks and reviews the role that physical climate risk plays in managing portfolios. [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]

The research paper entitled "Impact of Climate Change on Global Ecosystem and SDGs" is an attempt to define the climate change, its scope, adaptability, vulnerability and risk particularly in the context of its direct impact on cities globally. It is observed and learnt from various research studies and recent literature review on climate change impact and risks associated with it not only on the cities globally, but also its severe impact on the ecosystem due to its variability and forms as there are variations/changes/occurrences of climate hazards at different points of time including the uncertainty of climate change hazards and vulnerabilities associated with it. The onset of COVID-19 pandemic and its severity have also put tremendous pressure on the ecosystem and have resulted in climatic disorders thereby leading to serious imbalances in climate change across the ecosystem. A mention has also been made particularly with regards to the role of UN Security Council and the UNDRR agency in addressing climate change hazards, vulnerabilities, risks globally. The study has made a mention of the recent research studies/literature review on climate change and its impact on the ecosystem in the context of posing a threat to humanity and its wellbeing and health of the global ecosystem, integration of disaster risk reduction and climate change adaptation, impact of climate change on SIDS, adapting to new climate reality, nature-based solutions & natural variability, climate risk response, physical hazards and socioeconomic impacts and response, assessment and computation of climate change models capturing the related probabilistic functions, regressive behavior and non-linearity of climate change risk models etc., The paper also focuses on the quantitative assessment of climate change risk at an urban scale, impact on infrastructure services, process of decarbonization at scale including review of recent progress and outlook for future, research on downscaling of large-scale climate change to a local scale and its integration with the global scale and its effects, The other aspects covered in the study include major challenges in climate change, simulation of urban development and micro climate and vulnerability, risk identification in climate change, vulnerability of economy and wealth, ecosystem and biodiversity, resource availability, climate forcing among others. [ABSTRACT FROM AUTHOR]

Climate change is among the top global risks due to its growing adverse impact on businesses. However, few empirical studies address this imminent risk from a supply chain perspective. Due to a lack of established approaches for capturing complex interaction between climate change risk and supply chain performance, a three-phase mixed methodology approach was attempted. A cognitive map first captured the inter-relationships based on a mental model established by a group of experts. Later, a survey gathered from industry practitioners assessing causal relationships identified key climate change factors and most influenced supply chain performance dimensions. Finally, a system dynamics model supported by multiple case scenarios assessed the implications of climate change on supply chain performance. The results indicated a significant reduction in the availability of natural resources/raw material and capacity, leading to increase in stock-outs, inventory costs and bottlenecks disrupting procurement, manufacturing and logistics functions. Supply chain performance captured through efficiency and effectiveness shows a negative trend with increasing climate change consequences. The systems approach followed in this paper contributes by providing a quantitative model for assessing the impact of climate change risk on supply chain performance. [ABSTRACT FROM AUTHOR]

In Bangladesh, fishing communities are one of the most climate-vulnerable groups, though they play an important role in economic development. The main objective of this study was to identify vulnerability by exploring exposure (i.e., lack of regulating services or household capitals), susceptibility (i.e., lack of access to provisioning services), and lack of resilience (i.e., lack of alternative livelihoods and capacity) and to explore adaptation options, and challenges to understand risk governance. The study considered 45 published research articles for analysis following Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) guidelines. Keywords were used in combinations (e.g., fishing communities and Bangladesh) to identify and screen published articles. Articles published in English focusing on vulnerability and/or risk governance, published between 2011 and 2022, featuring original empirical data or a comprehensive systematic review, and published in peer-reviewed journals were included. Articles were excluded if vulnerability and risk governance were evaluated but did not fit or match the definition used in this study. The study found frequent disasters and ocean warming caused different stresses, such as reduced fish catch and income, and resulted in an increased risk of fisheries conflict. Moreover, fishing communities have limited access to properties, modern fishing equipment, financial institutions, and fisher-centered organizations. Adaptation strategies include ecosystem-based (e.g., plantation, payment for ecosystem services) and non-ecosystem-based (e.g., temporary migration, getting help from neighbors) approaches. To boost fish production, the Government of Bangladesh instituted fishing restrictions and social safety net programs (e.g., distributing rice during the fishing restrictions); both initiatives were helpful. However, the conservation policies are not being implemented properly, and there is no particular social welfare, such as banking systems, and low- or no-interest loans being provided that may support fishers to buy fishing equipment or generate alternative income sources. Considering the previous evidence of risks, this paper recommends that fisheries conservation policies be implemented properly, and fishing communities be provided with insurance services and no- or low-interest loans. This will contribute to reducing the climate-induced social-ecological risk and improve sustainable livelihoods that can withstand any regional, national, or local crisis. [ABSTRACT FROM AUTHOR]

Identifying sound strategies to manage climate risks requires understanding complex systems, characterised by; a large number of potential factors that interact; multiple stakeholder constituencies with diverse values, deep and dynamic uncertainties. This paper assesses the general understanding and dominant narrative regarding climate change in particular societies in order to track the trends regarding the management of climate risk. In this regard, this paper considers climate risk from a Zimbabwean perspective between 1980 and 2021. The assessment of climate risk in Zimbabwe took cognisance of the fact that climate change is a subject that has received a considerable amount of attention in Zimbabwean focused literature. As such, secondary data were used to understand the dominant narratives regarding climate risk in Zimbabwe. The climate risk discussion in Zimbabwe has significantly grown over past four decades nonetheless, it is evident that the dominant narrative is biased towards climate change adaptation particularly on aspects of agricultural and livelihoods sensitivity from a water scarcity perspective. Other adaptation components such as the exposure to hazards, indigenous knowledge systems, ecological and infrastructure vulnerability, communication and gender dimensions of climate change also form the bulk of issues that dominate the adaptation centred narrative. [ABSTRACT FROM AUTHOR]

Reserve power systems are widely used to provide power to critical infrastructure systems in the event of power outages. The reserve power system may be subject to regulation, typically focussing on a strict operational time commitment, but the energy involved in supplying reserve power may be highly variable. For example, if heating or cooling is involved, energy consumption may be strongly influenced by prevailing weather conditions and seasonality. Replacing legacy assets (often diesel generators) with modern technologies could offer potential benefits and services back to the wider electricity system when not in use, therefore supporting a transition to low‐carbon energy networks. Drawing on the Great Britain telecommunications systems as an example, this paper demonstrates that meteorological reanalyses can be used to evaluate capacity requirements to maintain the regulated target of 5‐days operational reserve. Across three case‐study regions with diverse weather sensitivities, infrastructure with cooling‐driven electricity demand is shown to increase energy consumption during summer, thus determining the overall capacity of the reserve required and the availability of 'surplus' capacity. Lower risk tolerance is shown to lead to a substantial cost increase in terms of capacity required but also enhanced opportunities for surplus capacity. The use of meteorological forecast information is shown to facilitate increased surplus capacity. Availability of surplus capacity is compared to a measure of supply–stress (demand‐net‐wind) on the wider energy network. For infrastructure with cooling‐driven demand (typical of most UK telecommunication assets), it is shown that surplus availability peaks during periods of supply–stress, offering the greatest potential benefit to the national electricity grid. [ABSTRACT FROM AUTHOR]

This paper assesses whether a climate factor is relevant to measure default risk in a sample of main companies listed on the STOXX Europe 600 exchange from 2010 to 2020. The starting point is a factorial panel data model which is subsequently modified to capture the climate impact through different functional forms. We find that relevant differences in default risk exist before and after the Paris Agreement. Our analysis also indicates that this difference cannot be explained by means of traditional financial factors. Finally, we further show that a climate change risk and opportunities label is a significant factor in evaluating credit risk, both prior to and post-Paris agreement. These results are important to the extent that they suggest that companies' market performance itself allows to measure differences in credit risk between companies and to link them with climate risk factors. This approach may be useful as a complement or in combination with the traditional use of exogenous climate factors that have been widely used in the literature in this field. [ABSTRACT FROM AUTHOR]

Copyright of Business Administration Quarterly / Kwartalnik Nauk o Przedsiebiorstwie is the property of SGH Warsaw School of Economics and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

The planned relocation of communities away from areas of climate-related risk has emerged as a critical strategy to adapt to the impacts of climate change. Empirical examples from around the world show, however, that such relocations often lead to poor outcomes for affected communities. To address this challenge, and contribute to developing guidelines for just and sustainable relocation processes, this paper calls attention to three fundamental tensions in planned relocation processes: (1) conceptualizations of risk and habitability; (2) community consultation and ownership; and (3) siloed policy frameworks and funding mechanisms. Drawing on the collective experience of 29 researchers, policymakers and practitioners from around the world working on planned relocations in the context of a changing climate, we provide strategies for collectively and collaboratively acknowledging and navigating these tensions among actors at all levels, to foster more equitable and sustainable relocation processes and outcomes. [ABSTRACT FROM AUTHOR]

Planet Earth's temperature has risen by about 1.1 degrees Celsius on average since the 1880s, confirmed by satellite measurements and by the analysis of hundreds of thousands of independent weather station observations from across the globe. This rate of warming is in an order of magnitude faster than any found in the past 65 million years of paleoclimate records — the rapid decline in the planet's surface ice cover provides further evidence of this.1 The banking industry is the custodian of global finance. It therefore has a central role to play in mitigating against this trend. After all, these are the institutions that occupy a key position as important catalysts in reorienting financial flows towards sustainable activities, supporting industries and governments in meeting climate risk and their environmental, social and governance (ESG) targets. However, should the onus be on the banking sector to drive this agenda? Yes, it has an important role to play, but should it be writing the overall global narrative? We will look at what banks are doing now to measure, and act upon, their own climate risk and ESG profile, and look at how much we should expect them to fund the overall 'green deal' or 'clean' strategy throughout 2022 and beyond. However, let us not forget, the banking sector has been focussing on money rather than ESG matters for centuries. For those new to the subject, we will also use this paper to provide some step-by-step advice and suggestions for what banks should be doing now to prepare for ESG issues. The paper opens with the theory, then moves into the practical, with a series of first-hand case studies. These cover the measures that Razor Risk's banking clients have been introducing to mitigate against climate risk, providing a critical reference point for the sector as a whole. [ABSTRACT FROM AUTHOR]

Global warming and rare weather caused by climate change continue to affect ecosystems, human health, and economic systems, which pose serious climate risk challenges for humanity. To address and adapt to climate change risks and to facilitate the process of achieving carbon peaking and carbon-neutral targets, the financial industry has become more concerned about the information spillover effects of extreme climate events on green financial products. Therefore, this paper adopts the Southern Oscillation Index (SOI) to describe climate change and investigates the influence of the SOI on the volatility of the NASDAQ OMX Green Economy Index (OMX-GEI) under a variant of the Double Asymmetric GARCH-MIDAS (DA-GM-X) model. The results show that the SOI provides relevant information for OMX-GEI volatility forecasting and the DA-GM-X model yields outstanding forecasting performance in statistical and economic terms. This conclusion indicates that considering SOI and its asymmetry changes can significantly improve the prediction accuracy of econometric models. Also, several robustness tests confirm our findings. Overall, the findings of this paper suggest that to achieve the two-carbon goal and combat climate change, governments should pay more attention to policy formulation that combines environment, climate, health, energy, and economy, and actively promote green, low-carbon, and sustainable energy development globally. [ABSTRACT FROM AUTHOR]

This paper examines the integration of climate risks into structural credit risk models. We focus on applications in housing finance and argue that mortgage defaults due to climate disasters have different statistical features than default due to household-specific reasons. We propose two models incorporating climate risk based on two separate default definitions. The first focuses on default as a response to a decrease in home value, and the second defines default as a consequence of missed mortgage payments. Using mortgage performance data during Hurricane Harvey, we conduct an empirical study whose results suggest that climate events are potentially another source of undiversifiable credit risk affecting homeowners' ability to make contractual monthly payments. We also show that incorporating this climate-specific default process may capture additional uncertainty in default probability assessments. [ABSTRACT FROM AUTHOR]

Background: As natural disasters increase in both frequency and magnitude because of climate change, assets, such as buildings and infrastructure, are exposed to physical climate risk. In addition, as our societies transition towards a greener economy, the transitional climate risk will manifest itself in different forms: reputational issues, market solutions that may drive out those that do not comply, technological disruptions and policy initiatives. How both risks, physical and transitional, impact the economic value of real estate assets is not well understood and will be investigated as the main scope of this systematic map. Method: we use systematic mapping to collate and configure existing evidence on how climate risk has affected the economic value of real estate assets. After designing a search string, English language peer-reviewed publications will be retrieved from the two largest and most popular scientific research databases, as well as a database containing policy documents. This corpus will be tested for comprehensiveness using a benchmark of 50 highly relevant articles. Once the comprehensiveness test is passed, a consistency test will be carried out on the screening of a randomly selected list of 200 articles by three reviewers. If a kappa score of at least 0.6 is achieved, one of the reviewers will carry out the remainder of the screening, with another reviewer quality assuring 10% of the screening. The retained corpus will then be distributed over the three reviewers, who will carry out the extraction of metadata according to an agreed coding strategy. The final output of the coding will consist of a heat map, showcasing where substantial evidence is available, and research gaps, providing recommendations for further research. In addition, the results will provide insight into the methodology to quantify the impact of climate risk on real estate value. Figures and tables will be designed to make it easy to comprehend the results of the mapping. [ABSTRACT FROM AUTHOR]

The impact of the climate change on the real economy and financial system has aroused great concern from the Chinese government and financial regulator. The objective of this paper is to examine the impact of climate risk on bank loan supply by using the sample of 403 commercial banks from China over the period 2008–2018 and fixed effects panel regression models. Our empirical studies obtain four findings. First, climate risk has a significant negative impact on the bank loan supply. Second, this adverse effect of climate risk can be mitigated by government's climate protection performance and monetary expansion. Third, climate risk can inhibit loan supply through reducing banks' risk appetites and decreasing their deposits. Finally, the negative influence of climate risk on loan supply is more pronounced for banks with less deposits and banks located in coastal areas. One policy implication is that commercial banks should adjust the structure of credit business and innovate loan products. [ABSTRACT FROM AUTHOR]

Copyright of Investigaciones Geograficas is the property of Universidad de Alicante, Instituto Universitario de Geografia and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)