Carbon Risk

GGrgen, Maximilian; Nerlinger, Martin; Wilkens, Marco

doi:10.2139/ssrn.2930897

Cited by 64 publications

(102 citation statements)

References 47 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…The "carbon beta" of a firm describes the firm's sensitivity to the global market carbon risk. Moreover, Görgen et al (2019) calculated the carbon beta for both countries and industries. While there is a wide range of negative to positive sensitivity of various industries, energy, basic materials, and utilities industries exhibit the highest carbon risk sensitivities.…”

Section: Assessment Approachesmentioning

confidence: 99%

See 1 more Smart Citation

Environmental Hazards and Risk Management in the Financial Sector: A Systematic Literature Review

Breitenstein

Nguyen

Walther

2021

Journal of Economic Surveys

View full text Add to dashboard Cite

We conduct a systematic literature review on environmental and climate-related risk management in the financial sector. We classify the current literature into three categories: (i) the impact of environmental concerns on financial risk; (ii) the current state of environmental risk practices in the financial sector; and (iii) measures to assess the financial exposure to environmental risks. We find that financial institutions can reduce their risk exposure by highly committing with environmental responsibility and performance. Moreover, the increase in willingness to assess climate-related financial risk incentivizes corporate managers to adopt more proactive environmental policies and practices.

show abstract

Section: Assessment Approachesmentioning

confidence: 99%

“…Regarding risk measurement methods and specifically the carbon footprint, Görgen et al . (2019) construct measures of carbon risk. The authors use four ESG databases to construct the “Brown‐Green‐Score” as an advanced approach to carbon risk.…”

Section: Research In Environmental Risk and Current Approaches To Envmentioning

confidence: 99%

Environmental Hazards and Risk Management in the Financial Sector: A Systematic Literature Review

Breitenstein

Nguyen

Walther

2021

Journal of Economic Surveys

View full text Add to dashboard Cite

show abstract

“…As Sevillano and González (2019) point out, huge financial resources are being spent on exploiting new reserves, despite the fact that current reserves already exceed the carbon budget (this is known as "wasted capital") and that only a fraction of fossil fuel reserves are burnable if the rise in temperature is to be limited to 2ºC by 2050. Görgen et al (2017) have found that companies considered to be "brown" (that is, with a higher exposure to carbon risk) perform worse on the stock exchange, compared with those that are "greener".…”

Section: Economic Consequences Of Climate Changementioning

confidence: 99%

Financial Stability and Climate Change

Fabris

2020

Journal of Central Banking Theory and Practice

View full text Add to dashboard Cite

Fighting climate change is one of the biggest challenges in the 21st century. Climate change that leads to global warming has been increasingly visible in our environment. Extreme weather conditions such as hurricanes, floods, and droughts have been escalating and their acceleration can be expected in the future. They cause changes in sea levels, epidemics, large fires, etc. Increasingly, we are witnessing minor or major damage caused by these extreme weather conditions. Numerous studies have proven that climate change has negative impact on economic growth and prosperity. However, this paper starts from the premise that in addition to unequivocally identified threats, climate change also creates opportunities.The paper reaches a conclusion that climate change can adversely affect balance sheets of financial institutions. Therefore, climate change is a source of financial risk and thus a part of the mandate of central banks and supervisors in preserving financial stability. This type of risk has not been given enough attention by either supervisors or financial institutions over the past period. This paper develops a model for managing financial risks as a result of climate change.

show abstract

“…Climate risk is a recent phenomenon in finance, and there is to date no consensus on how to measure it empirically. The majority of recent studies use either carbon emissions (Chen and Gao, 2012;Andersson et al, 2016;Liesen et al, 2017;Jung et al, 2018;Ilhan et al, 2019b;Ramelli et al, 2018) or ESG scores (Görgen et al, 2019) to proxy for climate risk. 9 Ginglinger and Moreau (2019) use a forward-looking measure, "Climate Risk Impact Screening," developed by the commercial data provider Carbone 4.…”

Section: Measuring Climate Riskmentioning

confidence: 99%

Does the CDS Market Reflect Regulatory Climate Risk Disclosures?

et al. 2020

View full text Add to dashboard Cite

Climate change may have a detrimental effect on a firm's financial performance. Using a forward-looking measure of climate risk exposure based on textual analysis of firms' 10-K reports, we assess whether climate risks-as disclosed to the regulator-are priced in the credit default swap (CDS) market. We construct this novel climate risk measure based on BERT, an advanced language understanding algorithm, and adapt it for our purpose. We differentiate between physical and transition risks and find that transition risk increases CDS spreads, especially after the Paris Climate Agreement of 2015. However, we do not find such an effect for physical risk.

show abstract

Carbon Risk

Cited by 64 publications

References 47 publications

Environmental Hazards and Risk Management in the Financial Sector: A Systematic Literature Review

Environmental Hazards and Risk Management in the Financial Sector: A Systematic Literature Review

Financial Stability and Climate Change

Does the CDS Market Reflect Regulatory Climate Risk Disclosures?

Contact Info

Product

Resources

About