According to the International Energy Agency’s Energy Outlook (2015) the necessary transition to a low-carbon economy will require around $1 trillion of investments a year for the foreseeable future. This generates in turn new investment opportunities. At the same time, according to one estimate by The Economist Intelligence Unit’s report on the Cost of Inaction, the value of assets at risk due to climate change uncertainties ranges from $4.3 trillion to $43 trillion from now until the end of the century (the current worldwide stock of manageable assets is estimated at $143 trillion).

Recognizing the systemic implications of climate change , the G20 Finance Ministers and Central Bank Governors asked the Financial Stability Board to review how the financial sector can take account of climate-related issues.

The Financial Stability Board published its Recommendations on Climate-related Financial Disclosures. It makes a strong call for businesses and investors to lead in the understanding and responding to climate-related risks and for increased transparency. The figure below captures the different layers of recommendations.

(Source: Figure 2 of the Final Report)