In this interview, Justus Dokter of FMO, the Dutch Development Bank, unpacks the challenges and opportunities of integrating climate risk into financial decision-making. He explains how FMO navigates climate impacts across diverse portfolios in over 80 emerging markets, balancing sector-specific vulnerabilities with adaptation strategies. Justus highlights the importance of embedding climate risk into core investment processes, leveraging both qualitative insights from client relationships and collaboration with global peers.

He also discusses the limitations of predictive modelling, the need for scenario-based approaches, and how institutions can move from viewing climate purely as a risk to also recognizing the opportunities for resilience financing and innovation. Looking ahead, he outlines three key drivers shaping the next five years: event-driven shocks, regulatory evolution, and a positive tipping point in banks’ ability to manage climate-related financial risks efficiently.