Thursday 16: Science and society panel session (2)

Thank you to everyone who attended the panel session! The presentation slides are now available on this webpage.

Venue: KOL-G-201 AULA

Time: 14:45 - 16:15 

From research to practice: How can financial institutions assess climate transition risk?

Scientific research is helping public and private investors to disclose their climate-related financial risks. The session presents advances on science-based methods that financial focuses on two case studies: the EU insurance sector and the EU Taxonomy of Sustainable Finance.

 

Climate risk in sovereign bonds and its impact on the EU insurance sector. The first part of panel will discuss the making and output of the first collaboration between climate economists, climate financial risk modellers and financial regulators, we apply the CLIMAFIN framework described in Battiston at al. (2019) to provide a forward-looking climate transition risk assessment of the sovereign bonds’ portfolios of solo insurance companies in Europe. Keywan Rihai (Director of IIASA Energy Program and IPCC Lead Author) will describe value and limits of Integrated Assessment Models (IAMs) in assessing the climate transition pathways. Stefano Battiston (UZH) will describe how to translate the knowledge from IAM trajectories into financial risk and financial valuation. Petr Jakubik (EIOPA) will discuss needs and challenges for the insurance sector and the financial supervisors with respect to climate risk, and how the exercise carried out contributes to addressing them.   

Joint report by WU, IIASA, UZH, and EIOPA: Climate Risk Assessment of the Sovereign Bond Portfolio of European Insurers by Stefano Battiston, Petr Jakubik, Irene Monasterolo, Keywan Riahi, Bas van Ruijven 

https://www.eiopa.europa.eu/content/climate-risk-assessment-sovereign-bond-portfolio-european-insurers-thematic-review-2019

The EU Taxonomy of Sustainable Finance. The second part of the session will cover the cornerstone of the European Commission's Action Plan on Financing Sustainable Growth, i.e. the establishment of an EU Taxonomy of sustainable activities. The EU Taxonomy is a classification system defining which economic activities are ‘green’, with an initial focus on climate change mitigation and adaptation. The Taxonomy will help the development of labels for green financial products or funds, and will also underpin disclosure and reporting of financial institutions and companies on climate and environmental activities and risks. Ultimately, it will provide clarity and transparency on environmental sustainability to the market. Lucia Alessi (EU Commission) will present the essential elements of the EU Taxonomy and a joint work with UZH to provide empirical estimates of what portion of current financial assets could be EU Taxonomy eligible. 

Joint report by JRC, ECB, UZH: "The EU Sustainability Taxonomy: a Financial Impact Assessment" by Lucia Alessi, Stefano Battiston, Sofia Melo and Alan Roncoroni: http://publications.jrc.ec.europa.eu/repository/handle/JRC118663

 

Speakers: Lucia Alessi (EU Commission), Stefano Battiston (UZH), Petr Jakubik (EIOPA), Keywan Riahi (IIASA). Moderated by Irene Monasterolo (WU)

Speakers

Monasterolo

Irene Monasterolo (WU) Webpage 

Irene Monasterolo is an Assistant Professor of Climate Economics and Finance at the Institute for Ecological Economics, Vienna University of Economics and Business. She is research fellow at Boston University (USA) and Universita’ Milano Bicocca (Cefes) and was visiting scholar at Stanford University. She has worked with several central banks (e.g. Austrian National Bank, Banco de Espana), financial regulators (e.g. the European Insurance and Occupational Pension Fund Authority (EIOPA)), development finance institutions (e.g. European Investment Bank, World Bank, Inter-American Development Bank) and the European Commission Joint Research Center and Community of Practice on Sustainable Finance. Irene has a track record of projects funded on sustainable finance and climate financial risk assessment, including the EC FET-EU Innovation Launchpad CLIMEX; the Central Banks and Financial Regulators Network for Greening the Financial System (NGSF) INSPIRE; the Austrian Climate Research Program project GREENFIN. Irene has been awarded the prestigious Dr. Maria Schaumeyer Habilitationstipendium funded by the Austrian National Bank, and the research prize “Econometric Models of Climate Change” 2019.
Publications

 

Alessi

Lucia Alessi (EU Commission)

Lucia Alessi is Project Leader at the European Commission, Joint Research Centre. Her team develops research in support of EU policy making mainly in the field of banking and financial stability, including emerging topics like Fintech and Sustainable Finance. Her more recent research focuses on green finance and the development of carbon stress tests for financial institutions. She has published in journals such as Journal of Business and Economic Statistics, Journal of Financial Stability, International Statistical Review, European Journal of Political Economy, Empirical Economics, and others.

Battiston

Stefano Battiston (UZH) Webpage

Stefano Battiston is Professor of Banking at the University of Zurich and Director of the FINEXUS Center for Financial Networks and Sustainability. He is a leading scholar in the field of systemic risk and sustainable finance. He has made advances in the scientific understanding of the relation between financial interconnectedness, complexity and climate related financial risk.
He has co-authored 50+ publications including on top journals such as PNAS, Nature Communications, Nature Climate Change and Management Science. His scientific background in complex systems, combined with 15 years of research in economics and finance, put him in a unique position to understand policy issues from a quantitative perspective. 

Jakubik

Petr Jakubik (EIOPA) Webpage

Petr Jakubik leads the Financial Stability Team at the European Insurance and Occupational Pensions Authority (EIOPA) responsible for financial stability analyses and assessments including insurance and pension stress tests, financial stability reports, risk dashboard and research. He is an associate professor in economic theories at the Charles University and the University of Finance and Administration in Prague.  Publications: https://ideas.repec.org/e/pja172.html

 

riahi

Keywan Riahi (IIASA) Webpage

Keywan Riahi is the Director of the Energy Program of IIASA and Visiting Professor, at the Graz University of Technology (TU Graz), Austria. Dr. Riahi leads a number of international research efforts, including EU funded projects on 'Exploring National and Global Actions to reduce Greenhouse gas Emissions (ENGAGE)' and 'Linking Climate and Development Policies-Leveraging International Networks and Knowledge Sharing (CD-LINKS)'. He is a member of Scientific Steering Committee of Integrated Assessment Modeling Consortium (IAMC) and other international and European scenario activities. Dr. Riahi has been appointed as a Coordinating Lead Author in Working Group III of the IPCC Sixth Assessment Report (Chapter 3 on Mitigation pathways compatible with long-term goals). 

Slides: