Climate change is no longer a distant threat— it’s a present and intensifying risk to the global financial system. During a roundtable convened by Carbon Tracker and CICERO held on 3 June 2025, experts, scientists, and financial stakeholders gathered to address a critical issue: the under-pricing of economic damages in climate risk models.

See the event write-up note for more in-depth insights.

Key points raised during the discussion:

• Climate risk DOES pose a quantifiable systemic risk to the financial system.
• The underestimation is severe – current models miss crucial physical risks and their cascading effects.
• Pension funds and financial institutions lack adequate tools to assess climate risk accurately.
• Scenario analysis is flawed, missing key transmission channels and long-term impacts.
• The investment mindset needs to shift from short-term returns to long-term resilience and decarbonisation.
• Policymakers have a crucial role in establishing clear frameworks and climate targets that guide investment decisions and align with the net zero transition.