Floods, fires and financial markets: the emerging lexicon of climate change risks
07 October 2020
The Commodity Futures Trading Commission’s (CFTC) Climate-Related Market Risk Subcommittee of the Market Risk Advisory Committee (MRAC) released a report in September 2020 entitled ‘Managing Climate Risk in the U.S. Financial System’.
In our analysis of the report and its implications, we discuss climate related risk exposure and how climate change potentially poses major risks to the stability of the U.S. financial system and to its ability to sustain the American economy. We discuss the inter-related factors of climate-related risk exposure and the growing demand from investors, shareholders, consumers, and some governments to regulators to move urgently and decisively to measure, understand, and address these risks.