Greenbiz (March 9, 2017) reports that climate risks are not sufficiently addressed in investment decisions due to high uncertainty and the long-term perspective that needs to be applied in order to capture the climate risks accurately. As the financial industry has been focused more on short-term profits, green businesses have historically had problems accessing long-term financial support for their low-carbon products and services. Part of the issue results from a systemic problem in analyzing risks for carbon-intense industries in the longer term. Some reports found that the financial industry considers climate change, energy transition and disruptive low-carbon technology risks to be low outside of the three- to five-year time frame. The financial industry models are partially biased due to the lack of resources for assessing and planning for these longer-term risks. Research of the Tragedy of the Horizon program (2017) demonstrates that overlooking long-term risks is also partly due to the lack of demand from the investment community for this long-term research.

The work of the Financial Stability Board on disclosure on climate-change-related risks of portfolios is instrumental in moving this debate forward. In addition, the financial sector will need to be better equipped in terms of tools and information to better and more accurately assess climate risks.