Three Practical Ways Financial Institutions Can Address Climate Risk

Article

Climate disasters are escalating, and financial institutions face a critical choice: adapt by pricing climate risk properly or ignore reality, leaving themselves and their clients exposed to massive losses. The failure to act is already causing widespread financial and environmental damage, and institutions must lead the way in building climate resilience.

Feb 25, 2025

Michael Sheldrick, Co-Founder & Chief Policy, Impact & Government Affairs Officer, Global Citizen

Tags: ESG and Climate Risk

Three Practical Ways Financial Institutions Can Address Climate Risk

The views and opinions expressed in this content are those of the thought leader as an individual and are not attributed to CeFPro or any other organization

Financial institutions must incentivize climate resilience by offering lower premiums to businesses and homeowners that implement disaster-prevention measures.
Insurers and investors should advocate for climate accountability, ensuring high-emission industries contribute to future recovery costs.
The impact of climate disasters extends beyond insurance—financial institutions need to address systemic risks and protect entire economies from collapse.
New financial tools, like natural disaster clauses, can provide critical relief to nations and businesses facing climate-induced crises, preserving financial stability.