Financing the transition to a low-carbon economy

Climate change is shifting the risk landscape for financial institutions, bringing with it a complex set of challenges and opportunities. The financial sector is responding by attempting to capitalise on emerging emissions markets, tracking the impact of new regulations on investments, and determining the potential physical impacts across key sectors and geographies. 

Pressure is increasing not only to integrate awareness of climate change into the core of your business, but also to profit from it.

The issues

• Climate regulation will soon alter the economic landscape in material and potentially irreversible ways.
• Physical risk from climate change will render certain sectors and geographies uncompetitive, and push already vulnerable sectors and geographies into economic history.
• Failure to innovate and deliver low-carbon or climate-friendly products may result in a competitive disadvantage as demand for such products increases. Conversely, those sectors or companies that do commercialise new technology may realise significant revenue growth.

How we can support you

Together with the climate change experts from Sustainable Finance, acquired by PwC in early 2009, we can help you:

• understand and assess climate risks at a transaction, client and portfolio level;
• determine the extent of your own direct carbon footprint and offset approaches; and
• capitalise on growing opportunities in the carbon, renewable energy and clean technology markets.

Case study

We undertook an assessment of climate change risk impacts across a UK bank's wholesale and consumer banking portfolio. The assessment covered regulatory, physical and market risks in 40 countries and over 300 sectors and sub-sectors. It considered the climate change risks the bank faces within the next 5-10 years, as well as the longer term beyond 15 years.