Climate change impacts on finance: managing one of the biggest threats to the global economy

Abstract

Nowadays, the world is facing one of the most critical issue for the world economic stability and trying to procrastinate climate change impacts is no longer acceptable. However, governments have understood that the financial system needs to become sustainable in the long run and that the transition to a low-carbon and green economy may facilitate this change. Therefore, in order to reach this pathway, it is necessary a realignment of the financial system with the Sustainable Development Goals (SDGs). The purpose of this thesis is to underline the critical role played by financial system and international cooperation to achieve the world economy sustainability. It has been analyzed the historical evolution of international climate policies and the development of the concept of climate finance. The Paris Agreement, signed in Paris in December 2015, has been one of the best results achieved in the international agenda. This thesis investigates the development of innovative financial instruments that in recent decades have been introduced in financial markets in order to combine sustainable growth with profitable financial results. It has been investigated how companies have perceived climate change risks and how they have dealt with. Moreover, it analyzes innovation in climate finance and the development of organizations for tracking and studying this phenomenon. Finally, it has been given an insight of the Italian landscape concerning climate finance initiatives and results already achieved according to the agreement made in Paris by developed countries to mobilize jointly USD 100 billion a year in climate finance by 2020.