Analytical approaches for the climate-related risk estimation of commercial banks’ credit activities: challenges, opportunities, and the way ahead
Type
journal article
Date Issued
2022-11-01
Author(s)
Abstract
Banks typically attempt to quantify climate-related risks, whether physical or transition ones, by adopting a top-down or a bottom-up analytical approach for the risk estimation of their borrowers. The two analytical approaches for risk estimation are regarded as mutually exclusive, when, in reality, they can complement each other in a mutually beneficial way. We discuss the challenges and opportunities of both analytical approaches with a focus on their applicability for commercial banks’ loans, and highlight directions for future research.
Language
English
HSG Classification
contribution to scientific community
HSG Profile Area
SoM - Responsible Corporate Competitiveness (RoCC)
Refereed
Yes
Publisher
Journal of Sustainable Finance & Investment
Division(s)
Eprints ID
267768