Foreword

Dr David Carlin

In a world facing the dual challenges of accelerating climate change and financial uncertainty, understanding the intersection of these forces has never been more urgent. This book arrives as financial institutions, regulators and policymakers grapple with how to quantify and address climate-related risks. It offers not only a much-needed critique of current practices but also a pathway to more effective approaches to risk management.

Tony and Sergio thoughtfully explore the nuances of climate risk in financial systems, highlighting critical gaps in modelling, policy and market assumptions. As they explain, relying solely on market discipline or historical data to guide our response to climate risk is a losing strategy. Instead, they argue for an integrated approach that acknowledges the unique and unprecedented nature of the climate challenge – one that requires regulatory clarity, robust scenario analysis and, above all, bold leadership from both the public and private sectors.

Having worked extensively at the intersection of risk, sustainability and finance, I have witnessed how the financial sector can drive meaningful change when equipped with the right tools and incentives