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‘Climate value at risk’ of global financial assets

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Dietz, Simon, Bowen, Alex, Dixon, Charlie, Gradwell, Philip·2016·Nature Climate Change

DOI 10.1038/nclimate2972

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“Published by The University of Chicago Press for AERE. https://doi.org/10.1086/723768 1We do not discuss physical risk (i.e., stranding from climate impacts; see Dietz et al. 2016) or transition risk unrelated to policy (e.g., fossil divestment due to changing social norms; Besley and Persson 2019).”
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“For example, Dietz et al. (2016) study the impacts of climate policies on the current market value of global financial assets; they find that the expected climate risk value of current global financial assets on the normal emission path is 1.8%, and the climate risk value at the 99th percentile is…”
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“Averaging and rounding figures from Dietz et al. (2016)(36) and EIA (2016, Table 1.”
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The impact of banks’ climate engagement on systemic risk. Does committing a little or a lot make a difference?
Birindelli, G., Dell’Atti, S., Tommaso, C. D., Iannuzzi, A. P., & Pacelli, V. (2024) · Research in International Business and Finance · doi:10.1016/j.ribaf.2024.102392 · Cited by 22
Climate risk and predictability of global stock market volatility
Zhou, M., & Ma, Y. (2025) · Journal of International Financial Markets Institutions and Money · doi:10.1016/j.intfin.2025.102135 · Cited by 22
Climate risks and cryptocurrency volatility: evidence from crypto market crisis
Yaâla, S. B., & Henchiri, J. E. (2025) · China Finance Review International · doi:10.1108/cfri-09-2024-0575 · Cited by 22
A place-based framework for assessing resettlement capacity in the context of displacement induced by climate change
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Making physical climate risk assessments relevant to the financial sector – Lessons learned from real estate cases in the Netherlands
Attoh, E. M. N. A. N., de Bruin, K., Goosen, H., van Veldhoven, F., & Ludwig, F. (2022) · Climate Risk Management · doi:10.1016/j.crm.2022.100447 · Cited by 32
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On the Dependence of Investor’s Probability of Default on Climate Transition ScenariosPreprint
Battiston, S., & Monasterolo, I. (2021) · SSRN Electronic Journal · doi:10.2139/ssrn.3743647 · Cited by 22
Interdisciplinary Research Maps: A new technique for visualizing research topics
Marrone, M., & Linnenluecke, M. K. (2020) · PLoS ONE · doi:10.1371/journal.pone.0242283 · Cited by 22
“in Nature Climate Change and Global Environmental Change) have started to engage with questions about how climate change impacts business and management decisions, including asset valuations and investment decisions [99, 100].”
Background
A bibliometric analysis on climate finance: current status and future directions
Shang, Q., & Jin, X. (2023) · Environmental Science and Pollution Research · doi:10.1007/s11356-023-31006-5 · Cited by 26
“…stays in public sector expenditures and international policy cooperation, while there is little real integration with �nancial mechanisms and products (Dietz et al. 2016; Carè and Weber 2023), which is re�ected in the fact that few climate nance-related content is published in �nance journals.”
Background
Adaption to climate change risk in eastern China: Carbon emission characteristics and analysis of reduction path
Yang, F., Chou, J., Dong, W., Sun, M., & Zhao, W. (2020) · Physics and Chemistry of the Earth Parts A/B/C · doi:10.1016/j.pce.2019.102829 · Cited by 21
Climate value at risk and expected shortfall for Bitcoin market
Yang, L., & Xu, H. (2021) · Climate Risk Management · doi:10.1016/j.crm.2021.100310 · Cited by 21
Stranded Assets: How Policy Uncertainty Affects Capital, Growth, and the EnvironmentPreprint
Bretschger, L., & Soretz, S. (2018) · SSRN Electronic Journal · doi:10.2139/ssrn.3157079 · Cited by 21
Climate change exposure and the use of short-term debt
Choi, S. (2024) · Finance research letters · doi:10.1016/j.frl.2024.105579 · Cited by 20
Climate transition spillovers and sovereign risk: Evidence from Indonesia
Gourdel, R., Monasterolo, I., & Gallagher, K. P. (2025) · Energy Economics · doi:10.1016/j.eneco.2025.108211 · Cited by 20
Dissecting the financial impact of climate risk
Yang, J., & Geng, J.-B. (2025) · Energy Economics · doi:10.1016/j.eneco.2025.108295 · Cited by 23
Nexus approach to enhance water-energy-food security and ecosystems resilience under climate change in the Mediterranean
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Systemic risk effects of climate transition on financial stability
Ojea-Ferreiro, J., Reboredo, J. C., & Ugolini, A. (2024) · International Review of Financial Analysis · doi:10.1016/j.irfa.2024.103722 · Cited by 20
Climate Change and Financial Policy: A Literature Review
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“(2016) [75] undertake a value-at-risk (VaR) exercise based on a version of the DICE model.”
Method
Media-based climate risks and international corporate bond market
Benkraiem, R., Dimic, N., Piljak, V., Swinkels, L. A. P., & Vulanović, M. (2024) · Journal of International Money and Finance · doi:10.1016/j.jimonfin.2024.103260 · Cited by 21

Authors: Dietz, S., Bowen, A., Dixon, C., & Gradwell, P.
Affiliations: Vivid Economics (United Kingdom) (GB)
Centre for Climate Change Economics and Policy (GB)
Corresponding author: Dietz, Simon
ORCID: Dietz, Simon
Venue: Nature Climate Change
Publisher: Springer Science and Business Media LLC
Published: 2016-04-04
Volume: 6
Issue: 7
Pages: 676-679
ISSN: 1758-678X (ISSN-L)
1758-6798
DOI: 10.1038/nclimate2972
OpenAlex: W2330768275
Cited by: 694
References: 33
Citations by year: 2026: 111 · 2025: 126 · 2024: 121 · 2023: 66 · 2022: 66 · 2021: 72 · 2020: 45 · 2019: 32 · 2018: 27 · 2017: 19 · 2016: 6
FWCI: 42.30
Type: journal article
Language: en
Open access: green
orcid.org
Licence: www.springer.com/tdm (tdm)
Locations: Nature Climate Change (publishedVersion)
London School of Economics and Political Science Research Online (London School of Economics and Political Science) (acceptedVersion)
London School of Economics and Political Science Theses Online (London School of Economics and Political Science) (acceptedVersion)
LSE Research Online Documents on Economics (submittedVersion)
RePEc: Research Papers in Economics (submittedVersion)
Funders: Grantham Foundation for the Protection of the Environment
Economic and Social Research Council (ES/K006576/1)
Topics: Social Sciences › Economics, Econometrics and Finance › Finance › Sustainable Finance and Green Bonds
Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Climate Change Policy and Economics
Physical Sciences › Environmental Science › Global and Planetary Change › Climate Change and Geoengineering
Keywords: financial assets, 2°C target, integrated assessment models, business-as-usual emissions, tail risk, mitigation costs, risk-neutral investors, risk-averse investors

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