Climate Change Risks

An influential stream of research finds that companies that emit more carbon have higher stock returns. This "carbon premium" has been interpreted as evidence that emitting companies suffer a higher cost of capital and thus markets are correctly pricing in carbon risk. However, the ESG literature typically interprets higher stock returns as outperformance due to mispricing. In a new paper with Yigit Atilgan, Özgür Demirtaş, and Doruk Gunaydin, we study earnings surprises to disentangle these explanations. We find that emitting companies enjoy positive earnings surprises, and the four earnings announcements per year explain 30-50% of the annual carbon premium. Consistent with prior results, our findings only hold for levels of and changes in emissions, but not emissions intensities or disclosed emissions only. Our results suggest that, where it exists, the carbon premium arises from an unpriced externality - emitting companies are able to "get away with" contributing to global warming. Markets are not fully pricing in carbon risk, highlighting the need for government action. https://lnkd.in/e9QnXars

Climate change is not gender neutral — it amplifies existing inequalities. Women, especially in vulnerable communities, face disproportionate risks due to limited access to land, finance, and decision making power. They are often the first to lose livelihoods and the last to be heard in policy spaces. Yet, they remain frontline responders - managing households, securing water and food, and holding communities together during crises. What’s missing is not awareness, but inclusion with agency. Climate action frameworks still underrepresent women in leadership, fail to integrate their lived knowledge, and overlook structural barriers like land ownership, credit access, and safety in displacement. Without embedding gender responsive planning, financial inclusion, and localized capacity building, resilience efforts remain incomplete and inequitable. The intent must shift from viewing women as beneficiaries to recognizing them as leaders of climate resilience. Investing in their skills, ensuring access to resources, and placing them at the center of climate governance is not just equitable — it is effective. Real climate solutions will emerge when policies, markets, and communities align to empower women as decision makers, innovators, and change agents. #KYA_LAGTA_HAI #Resilience #ClimateAction #GenderEquality #Climatejustice #PolicyMatters #InclusiveGrowth #Sustainability #SocialImpact #WomenLeadership #WomenEmpowerment

Heatwaves are usually treated as a weather story. But we should also pay attention to the impact they have on recovery. At Terra API, I linked 1.4 million wearable-recorded nights to Open-Meteo weather data across Europe and looked at what happened during the late June 2026 heatwave. My assumption was that hot nights make people lie awake for longer. But the data suggested something different. Each +1°C increase in night minimum temperature was associated with about 1.4 minutes less sleep. On their hottest nights, people slept a median of 11 minutes less than on their coolest nights. Over a heatwave week, that is roughly 1.5 hours of lost sleep. But the mechanism was the interesting bit. People did not spend much longer awake in bed. Instead, time in bed shrank almost in parallel with sleep duration. Hot nights looked less like a restless-sleep problem and more like a compressed sleep-window problem. People appear to be going to sleep later, waking earlier, or both. I think the practical question is not only how we stop people from waking up. It may be: how do we make bedrooms, routines and buildings tolerable enough that people stay in bed long enough in the first place? The regional differences were interesting too. France and the UK showed larger sleep losses. Iberia, despite already warm nights, showed a smaller penalty. That suggests adaptation is real: behaviour, building design, cooling, expectations, and possibly physiology. Caveat: this is a blunt population-level analysis, not a perfect causal study. But the signal is clear enough to pay attention to. Heat not only makes running slower. It also appears to reduce sleep. Full research blog link in the comments below #Heatwaves #SleepScience #HumanPerformance #WearableTechnology #Recovery

📊 Exciting new research from the European Central Bank (ECB) sheds light on how banks are pricing climate risk in their lending practices! 🌿 In their working paper, Carlo Altavilla, Miguel Boucinha, Marco Pagano, and Andrea Polo combine euro-area credit register data with carbon emission information to uncover fascinating insights into the intersection of finance and climate change. 🏦 The study finds that banks are indeed factoring climate risk into their lending decisions. Firms with higher carbon emissions face higher interest rates, while those committed to reducing emissions enjoy lower rates. Interestingly, banks that have publicly committed to decarbonization goals (through initiatives like Science Based Targets initiative) are even more aggressive in this pricing strategy. 💶 But here's where it gets really intriguing: the researchers uncovered a "climate risk-taking channel" of monetary policy. When the ECB tightens monetary policy, banks not only increase their overall credit risk premiums but also amplify their climate risk premiums. This means that during periods of monetary tightening, high-emission firms face a double whammy of increased borrowing costs and reduced access to credit compared to their greener counterparts. The authors argue that while restrictive monetary policy may slow down overall decarbonization efforts, it inadvertently creates a more favourable environment for low-emission firms and those committed to going green. 🌍 These findings are crucial for understanding how the financial sector is adapting to climate change and how monetary policy interacts with climate-related financial risks. It's also clear that the greening of finance is not just a trend, but a fundamental shift in how risk is assessed and priced in our economy. #ClimateFinance #SustainableBanking #MonetaryPolicy #ECB #GreenEconomy #ClimateRisk

When climate finance 💰 overlooks women, resilience becomes an unfinished equation. Because the real question isn’t how much money is available. It’s who gets to use it, and for what ⁉️ Climate resilience is built on more than field-level adaptation. It’s about how institutions design, deliver, and govern access to finance. That was a key message in the FAO report “Empowering Women in Egypt’s Livestock and Dairy Subsectors: A Gender-Transformative Approach to Climate Resilience and Economic Inclusion.” One of the strongest recommendations? 👉 Expand tailored financial services and credit for women in agriculture. Here’s why that matters ⤵️ Climate finance is often imagined in billions 🤑 global pledges, large-scale projects, and infrastructure funds. But resilience often starts with smaller, local decisions: 👉 a woman farmer 👩🌾 taking a loan to buy solar-powered cooling, 👉 a cooperative accessing microcredit to reduce waste, 👉 a dairy producer investing in drought-resistant feed. Yet only 2% of rural women in Egypt have access to agricultural credit. That’s not a funding gap. It’s a systems gap. When finance mechanisms overlook women’s realities, they weaken the very resilience they aim to build. And this isn’t unique to Egypt. As the Gender and Climate Finance report shows, global funds still struggle to translate gender commitments into measurable results with limited data, scarce dedicated funding for women-led initiatives, and uneven accountability for outcomes. Working across government, development, and academia, I see this gap often the space between frameworks and lived experience. Designing finance that actually reaches women, and trusts them as economic actors, is where real transformation begins. Because climate finance that includes women isn’t just fairer. It’s more effective. It builds stronger markets, communities, and systems of resilience. 💡 The strength of any climate system depends on who it’s built to serve. (The timeline below, from the Gender and Climate Finance report, tracks how far international climate funds have come in integrating gender and how far there’s still to go.) #climatefinance #womenempoerment #womeninagriculture #financialinclusion #sustainability #genderequality #developmentfinance #climateaction ODI Global Climate Vision Consulting

Climate Change Is A Public Health Issue If night time room temperature of 24 degC is the threshold for comfortable sleep, no wonder we increasingly need aircon to sleep well. It's not because people are becoming soft or too used to aircon. Aircon is really becoming a necessity for long term health reasons. In Singapore’s 3rd National Climate Change Study, it is mentioned that: "More warm nights where temperatures exceed 26.3 degrees Celsius are also projected. From an average of 76 nights per year in the last 40 years, Singapore could experience such warm nights most nights in the year by end century." https://lnkd.in/g4m_9RQh And this is using a threshold of 26.3 degC that is significantly higher than the WHO recommendation of 24 degC. At 24 degC, I suspect many (most?) nights in Singapore are already above the threshold. Also, official temperature measurements by the Met Service try to eliminate the urban heat island effect, so the actual temperature in a housing estate could well be higher than the official MSS figures. Which brings me to my favourite topic of using wearable cooling suits or cooling blankets instead of aircon. Let's try to cool the person, not the room. "High night time temperatures can become dangerous if they prevent the human body from cooling off and recovering from daytime heat. The World Health Organisation (WHO) recommends keeping room temperature at or below 24 deg C during the night – a threshold above which sleep can be uncomfortable. This is especially important for vulnerable people, such as babies, the elderly and people with chronic health conditions, according to the WHO. Around 2.4 billion people experienced at least two additional weeks on average per year over the past decade when the thermometer didn’t fall below 25 deg C at night, it found." "Long-term historical data being patchy or missing for many countries, researchers decided to compare their findings with an imaginary world where the only thing that has changed is the amount of carbon in the atmosphere. The Caribbean nation of Trinidad and Tobago experienced the largest increase of any country, with an extra 47 nights per year above 25 deg C. The Indian city of Mumbai endured an additional two months of hot nights. The 25 deg C threshold “isn’t some hard-and-fast number below which health is fine and above which health is harmed,” Dr Obradovich, who was not involved in the analysis, explained." "Several studies have shown that nocturnal temperatures above 25 deg C deteriorate the quality and length of sleep –- which is vital for humans to function – and increase the risks of strokes, cardiovascular conditions and mortality. The elderly and people on lower-income are disproportionally affected, researchers previously found." https://lnkd.in/guE8QQQK

A recent report, led by Greenpeace International, Milieudefensie, Harvest, and cosigned by 18 other NGOs, exposes how EU banks and other financial institutions are funding companies in industries such as soy, cattle, and palm oil, posing a grave threat to vital ecosystems. Since the 2015 Paris Climate Agreement, these banks have extended over €256 billion in credit to these sectors and have investments totaling €60 billion. Prominent banks implicated include Rabobank, BNP Paribas, Deutsche Bank, and Santander. Major players like Bunge, Cargill, JBS, and Marfrig are linked to recent ecosystem destruction in regions like the Amazon and Southeast Asia. Agricultural expansion, responsible for 80% of global deforestation, is fueled by pressure for size over sustainability, supported by EU financial institutions. Despite commitments to climate, biodiversity COP and nature action, EU banks remain complicit, risking financial standing and customer well-being. Stranded assets, particularly in regions where forests are cleared for agriculture, pose significant risks. Although the EU Deforestation Regulation marks significant progress, it notably excludes the financial sector. This report underscores the necessity for targeted regulations to cease financial support to businesses engaged in nature destruction. It's imperative that we enact laws to safeguard and rejuvenate nature, recognizing it as our ultimate wealth. We strongly urge the EU Commission to take resolute action and curb financial flows that fuel nature destruction, as financial institutions are unlikely to enact voluntary changes. #DefundNatureDestruction #NatureNow #NatureRising #RestoreNature #GreenOverGreed #BiodiversityOverBanks #ForestsOverFinance https://lnkd.in/dfF5ZDtm

Physical climate risk data: the more we learn, the less we know? Khalid Azizuddin's recent piece in *Responsible Investor captures well what many practitioners are grappling with today: - asset-level data that remain incomplete or hard to interpret; - physical hazard exposure often disconnected from financial materiality; - little visibility on supply chains or customers; - adaptation and resilience efforts largely ignored; - and a risk of over-simplifying complex realities into a single “score.” Some three years ago, EDHEC Business School set out to address exactly these challenges, working to advance climate risk modelling and make decision-useful for investors, companies, and public authorities. In this work, we have developed: 🔹 a blueprint for a new generation of probabilistic climate scenarios; 🔹 high-resolution geospatial modeling capabilities to allow for geographic and sectoral downscaling, consistent with each scenario; 🔹 an open database of decarbonisation and resilience technologies through the #ClimaTech project, which officially launched this week. While the research is public, the new EDHEC Climate Institute has also been assisting a school-backed venture, Scientific Climate Ratings (SCR), which integrates this research to deliver forward-looking quantification of the #financialmateriality of climate risks for infrastructure companies and investors worldwide. While SCR provides a rating scale for comparability, it avoids the trap of over-simplification. Each rating is backed by probabilistic scenario modelling, analysis of physical and transition risk exposures, and explicit accounting for adaptation measures. The result is a synthesis that remains transparent, interpretable, and anchored in scientific rigour. Together, these initiatives aim to move the discussion from data abundance to decision relevance, equipping practitioners with tools that connect climate science, finance, and strategy.

Honoured to see our op-ed, “Rights, justice, action for India’s women farmers,” in The Hindu for #International #Women’s #Day 2026, co-authored with Dr Soumya Swaminathan, Chairperson, M S Swaminathan Research Foundation and Elisabeth Faure, Representative and Country Director, World Food Programme in India. As farming in #India feminises, women farmers are feeding the nation but remain largely invisible in our laws, data and decision-making. When women have land, resources and a voice, they drive #climate-resilient, biodiversity-rich and #nutrition-sensitive #agriculture. ✨ Key actions we call for: 🌾 Recognise women as farmers – count them in official data, value their roles across the agri-food system, not just through land ownership. 📜 Secure land and tenure rights – implement equal inheritance, promote joint land titles, and make registration truly gender-responsive. 🤝 Strengthen women’s collectives – support self-help groups and producer organisations so women can access credit, inputs and markets with stronger bargaining power. 📊 Make women visible in policy – generate and use gender-disaggregated data to design programmes that actually reach women on the ground. 🌱 Align food systems with nutrition – use public procurement, kitchen gardens and women’s seed banks to promote diverse, nutritious crops. ⚙️ Invest in technology and services – ensure access to labour‑saving tools, climate-smart technologies and equitable extension services. Pradnya Paithankar shariqua yunus khan

By 2050, climate change may push 158 million more women and girls into poverty. While women handle 50% of global food production, only 15 countries include gender in agricultural climate planning. Despite often being hit the hardest by climate impacts, women and girls are powerful agents of change. From indigenous women protecting vital carbon sinks in the Amazon to female-led disaster committees reducing community vulnerability in flood-prone regions, to leaders and activists transforming international climate policy by championing gender-responsive approaches, their leadership drives effective solutions.    This #WorldEnvironmentDay, let's commit to gender-responsive climate action by centering women in policy development, directing climate financing to women-led programs and achieving gender parity in decision-making. Read more in my latest article: