Helping Financial Institutions Manage Climate Risk

Navigant and The Generation Foundation released their latest paper on internal carbon pricing

Since the Paris Agreement in 2015, climate change has been pushed to the top of the agenda for policymakers, consumers, and investors. Companies are facing increasing pressure to assess the compatibility of their businesses to a low-carbon economy. This is also causing more banks and investors to align their portfolios with the Paris Climate Agreement.

The Carbon Pricing Unlocked partnership was launched by Navigant and The Generation Foundation in 2016 to discover how carbon pricing can facilitate sustainable economic growth. Together they have released their latest paper “Internal Carbon Pricing for Low-Carbon Finance,” which describes how internal carbon pricing can be a critical component in helping financial institutions identify the risks and opportunities inherent in the transition to a low-carbon economy.      

Many financial institutions are already aware of the need to integrate carbon costs into their investment or lending practices. However, the methodology of setting an internal carbon price remains unclear, making it difficult to validate the materiality of carbon risks and opportunities.

This paper offers the the guidance institutions need to implement internal carbon pricing, using a combination of existing methodologies for assigning a carbon price, case studies, and step-by-step examples.

 

Download the Internal Pricing for Low-Carbon Finance Report

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