Climate change: Basel must meet Paris.

Abstract

In a first in the history of the Global Risks Perception Survey of the World Economic Forum’s, in 2020, the risks of climate change and related environmental issues occupy the top five spots in terms of likelihood. Managing these risks require large scale investments, and inaction could cost the global economy $150 billion annually (2014 White House report). The International Finance Corporation of the World Bank estimates that the Paris Agreement opened up an $23-trillion opportunity (till 2030) for climate initiatives in EMEs that account for 70% of the total global climate investment requirement. However, according to the Climate Policy Initiative, current climate investments are a mere 2% of the total required. If the targets for climate-focused investments are to be met through banks and capital markets, a major shift is required in the current trajectory.