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Public event

Supporting climate risk management practices: how financial institutions go beyond disclosure

This COP29 side-event organised at the IDFC pavilion and online will highlight recent findings on climate risk management relevant to financial institutions and have them share their experience on how they can work together for better climate risk management, and on how they can develop financial instruments that adapt to the risks their counterparties might be facing. It will help them better contribute to addressing global climate risks, target their assistance to increase resilience in local economies, going further beyond risk disclosure.

 

Key takeaways of the event included:

  • Climate risk tools may be underused because of the imbalances in regional resource availability, potentially leading to oversight of climate risks in emerging markets
  • Due to perceived unfavourable risk-reward profile of low-carbon opportunities, financial institutions are reluctant to commit to orderly finance flows for transitioning activities
  • Some financial institutions struggle to navigate the changing landscape, with rapidly emerging regulation and standards, and need context-specific guidance, especially in developing economies
  • Public development banks need to fund a risk mitigation approach that leaves no one behind, including the entities funded by financial counterparties
  • Many financial institutions have benefitted from capacity building, training, and case studies shared by public development banks on climate risk management
  • Climate change resilience could be enhanced by pursuing co-benefits in different development sectors depending on the contexts of each country and region, maximising synergies and minimising trade-offs