Climate Change

Climate Risks That Don’t Appear in Financial Models Modern financial models—Value-at-Risk (VaR), credit scoring systems, and climate stress tests—are increasingly incorporating climate variables. Yet a growing body of research suggests that key climate risks remain structurally absent, mischaracterized, or severely underestimated. These blind spots are not minor technical issues; they can materially distort asset pricing, […]

Climate Transition Risk That Isn’t in the Numbers Climate transition risk is now one of the most heavily modeled forces in finance. Banks run NGFS scenarios and insurers stress-test portfolios, creating an illusion of completeness. However, a growing body of research suggests that the most consequential risks are those that do not show up cleanly