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 poses a systemic risk to the financial system,
- Current economic models underestimate climate damages, especially physical risks.
- 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,
- Investors must shift focus from short-term returns to long-term resilience and decarbonisation,
- Policymakers play a key role in setting clear policy frameworks and climate targets that guide investment decisions and align with the net zero transition.
