Flawed or biased data accumulated during stable periods may not accurately predict outcomes in changing global landscapes, highlighting the fragility of risk management in financial systems and environmental sustainability.

The global financial system, heavily reliant on the US dollar, faces instability due to disproportionate reliance on fiat currencies, potentially leading to significant market volatility and repercussions.

Environmental degradation, driven by historical growth in carbon emissions, has reached a critical tipping point, posing severe risks to natural ecosystems and human societies.

Financial institutions face increasing responsibility to address climate change, including compliance with regulations, reducing carbon investments, and advocating for sustainable practices, but societal solutions are also essential.

In the US, climate change impacts financial institutions through transition risks, such as navigating unpredictable regulatory changes and public perception, rather than direct insurable events.

Global coordination is necessary for effective solutions to climate change, but divergent approaches among regions complicate unified responses, necessitating collaborative efforts across borders.

Financial intermediaries play a crucial role in adjusting the cost of capital for economic sectors, influencing investment decisions, and operational practices, but their responses may vary due to complex stakeholder priorities and regulatory compliance pressures.