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FINEXUS: Center for Financial Networks and Sustainability

UN Climate Change Conference 2016


COP22 Marrakech Side Event

“Disentangling the Climate-Finance Nexus: methods for 2°C alignment
and climate stress-tests for institutional investors and development banks.”


Time: 09:00-10:30, Thursday Nov 10th 2016, Theme Energy

Venue: COP22  Green Zone, Room Souss


Aims and Scope. The urgency of estimating the impact of energy transition risks on the financial system is increasingly recognized among scholars and practitioners. Indeed, assessing the implications of climate policies in terms of both systemic risk and opportunities for economic growth is a precondition to assess the political feasibility of climate policies. However, traditional risk analysis is inadequate to deal with the intrinsic uncertainty of models estimates of the effects of climate policies on carbon stranded assets, and calculations of expected losses/gains can be largely inaccurate. The findings of recent research work support the idea that the timing and governance process in the implementation of climate policies matters. In a scenario in which policies are implemented early on, and within a stable policy framework, climate policies could result in potential net winners and losers across investors in the energy sector but would not have adverse systemic impact.


In the context above, this COP22 side-event will provide first-hand knowledge on (1) recent innovative approaches to assess exposures to climate-relevant sectors (fossil fuels, utility, transport, housing and energy intensive sectors) and portfolios’ alignment with climate targets; (2) successful applications to empirical case-studies of interest to practitioners, regulators and multilateral development banks and institutions; and (3) lessons learnt from the case studies, in order to mainstream among institutional investors and development banks the analysis of climate-policy risk exposures and portfolios’ alignment with the 2 C target.


Target Audience: Practitioners and policy makers (e.g. central banks, investment funds and development banks), civil society and academics. 



  • Stefano Battiston (University of Zurich), Climate stress-test of the EU financial system
  • Thomas Braschi (2 degrees investing initiative), SEI Metrics methodology for 2deg portfolio compliance
  • Irene Monasterolo (Boston University), Financing the energy transition: green bonds, carbon tax and fossil fuels subsidies’ trade-off
  • Luigi Carafa (Barcelona Centre for International Affairs), Climate finance in developing and emerging economies: the role of policy de-risking.