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Risks
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Climate Change and Financial Risks
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Climate Change and Financial Risks

A special issue of Risks (ISSN 2227-9091).

Deadline for manuscript submissions: 15 December 2026 | Viewed by 3367

Special Issue Editors

Dr. Lien Duong

E-Mail Website
Guest Editor
School of Accounting, Economics and Finance, Curtin University, Perth, WA 6102, Australia
Interests: ESG (environmental, social, and governance); climate change; capital markets research; mergers and acquisitions; executive compensation; tax; gender
Prof. Dr. Grantley Taylor

E-Mail Website
Guest Editor
School of Accounting, Economics and Finance, Curtin University, Perth, WA 6102, Australia
Interests: corporate governance; financial instruments; capital markets; corporate social responsibility

Special Issue Information

Dear Colleagues,

Climate-related risks are systemic in nature, with the potential to significantly affect companies, investors, and consumers. The increasing volatility in weather patterns due to climate change introduces substantial risks to businesses and projects. Projections indicate that climate change will expose entities to a myriad of risks, including those related to climate itself, carbon pricing, and energy. Consequently, it is crucial to understand how management teams are addressing and disclosing these climate-related risks and opportunities, given their profound environmental, social, and regulatory implications for investors, financial intermediaries, and governments.

We invite submissions that delve into the financial, legal, operational, and public policy ramifications of climate change risks, informed by the perspectives of a diverse range of stakeholders. This includes analyses and case studies that explore the following:

  1. Financial impacts: How climate-related risks affect market valuations, asset prices, and investment strategies. Examination of the integration of climate risk into financial reporting, and the role of financial intermediaries in managing these risks.
  2. Legal and regulatory implications: The evolving legal landscape surrounding climate change, including litigation risks, regulatory requirements, and compliance challenges. Consideration of how regulatory frameworks are adapting to address climate-related risks and the implications for corporate governance.
  3. Operational challenges: The direct and indirect impacts of climate change on operational continuity and supply chain resilience. Strategies for mitigating operational risks and enhancing organizational adaptability in the face of climate volatility.
  4. Public policy considerations: The role of public policy in shaping responses to climate change risks, including the effectiveness of current policies and the need for new legislative initiatives. Analysis of government strategies for climate adaptation and mitigation, and their impacts on different sectors and communities.
  5. Stakeholder engagement and communication: Best practices for engaging stakeholders in the conversation about climate risks, including transparent disclosure practices and effective communication strategies. Exploration of the role of corporate social responsibility and sustainability initiatives in addressing stakeholder concerns.

Your sincerely,

Dr. Lien Duong
Prof. Dr. Grantley Taylor
Guest Editors

Manuscript Submission Information

Manuscripts should be submitted online at www.mdpi.com by registering and logging in to this website. Once you are registered, click here to go to the submission form. Manuscripts can be submitted until the deadline. All submissions that pass pre-check are peer-reviewed. Accepted papers will be published continuously in the journal (as soon as accepted) and will be listed together on the special issue website. Research articles, review articles as well as short communications are invited. For planned papers, a title and short abstract (about 250 words) can be sent to the Editorial Office for assessment.

Submitted manuscripts should not have been published previously, nor be under consideration for publication elsewhere (except conference proceedings papers). All manuscripts are thoroughly refereed through a single-blind peer-review process. A guide for authors and other relevant information for submission of manuscripts is available on the Instructions for Authors page. Risks is an international peer-reviewed open access monthly journal published by MDPI.

Please visit the Instructions for Authors page before submitting a manuscript. The Article Processing Charge (APC) for publication in this open access journal is 1800 CHF (Swiss Francs). Submitted papers should be well formatted and use good English. Authors may use MDPI's English editing service prior to publication or during author revisions.

Keywords

  • climate-related risks
  • business risks
  • financial impacts
  • legal and regulatory challenges
  • operation challenges

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Published Papers (3 papers)

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Research

22 pages, 454 KB  
Article
Climate Policy Uncertainty and Housing Prices: Analyzing Bidirectional Transmission Across U.S. Metropolitan Areas
by Sourav Batabyal and Alper Gormus
Risks 2026, 14(5), 114; https://doi.org/10.3390/risks14050114 - 9 May 2026
Viewed by 392
Abstract
This study examines the relationship between climate policy uncertainty (CPU) and residential housing prices across U.S. metropolitan areas using the U.S. CPU index developed by Gavriilidis in 2021 and monthly S&P CoreLogic Case-Shiller Home Price Indices, covering January 1991 to May 2024. Employing [...] Read more.
This study examines the relationship between climate policy uncertainty (CPU) and residential housing prices across U.S. metropolitan areas using the U.S. CPU index developed by Gavriilidis in 2021 and monthly S&P CoreLogic Case-Shiller Home Price Indices, covering January 1991 to May 2024. Employing a Fourier-augmented Toda–Yamamoto causality framework that accounts for both abrupt and gradual structural breaks, we document significant CPU → housing prices transmission in multiple metropolitan markets, with bidirectional transmission dynamics emerging in Los Angeles, New York, San Diego, and San Francisco, as well as at the U.S. national level. The results reveal substantial spatial heterogeneity across various market types. Coastal high-exposure markets exhibit strong CPU sensitivity, which may reflect the influence of physical climate risks and regulatory uncertainty; inland growth markets display housing prices → CPU feedback, likely operating through political economy channels; Midwest extreme-weather markets show persistent transmission despite their non-coastal locations; recession-sensitive markets become CPU-responsive following the Great Recession; and insulated markets show no significant transmission. The findings indicate that CPU operates as a priced systematic risk factor requiring integration into housing finance oversight, macroprudential frameworks, and investment strategies. These results have important implications for financial stability monitoring, mortgage credit risk assessment, and climate policy design as markets navigate transition risks in a low-carbon economy. Full article
(This article belongs to the Special Issue Climate Change and Financial Risks)
23 pages, 636 KB  
Article
The Impact of Climate Change on Banking System Stability in Southern Africa Development Communities (SADC)
by Oliver Takawira, Emmanuel Amo-Bediako, Dimakatso Sekwati and Silas Marimo
Risks 2026, 14(3), 69; https://doi.org/10.3390/risks14030069 - 18 Mar 2026
Viewed by 707
Abstract
In today’s world, climate change has become a global predicament. The implications for financial sector activities have given rise to ample literature on the climate change and banking system stability nexus in developing economies. However, there still remain important knowledge gaps pertaining to [...] Read more.
In today’s world, climate change has become a global predicament. The implications for financial sector activities have given rise to ample literature on the climate change and banking system stability nexus in developing economies. However, there still remain important knowledge gaps pertaining to areas such as the asymmetric impact of climate change on banking system relationships, threshold effects, and transmission channels. Therefore, this research investigated the impact of climate change on banking system stability in the Southern Africa Development Communities (SADC). The study employed a panel data estimation technique, analysing fixed and random effects to test these hypotheses in SADC. In doing so, it not only explored how climate-related risks affect banking stability but also assessed how economic, environmental, and institutional dynamics mediate this relationship. The findings contribute to informing regional policy on financial resilience and adaptive climate strategies within fragile banking environments. Full article
(This article belongs to the Special Issue Climate Change and Financial Risks)
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53 pages, 7642 KB  
Article
The Italian Actuarial Climate Index: A National Implementation Within the Emerging European Framework
by Barbara Rogo, José Garrido and Stefano Demartis
Risks 2025, 13(10), 192; https://doi.org/10.3390/risks13100192 - 3 Oct 2025
Cited by 1 | Viewed by 1403
Abstract
This paper presents the development of a high-resolution composite index to monitor and quantify climate-related risks across Italy. The country’s complex climatic variability, extensive coastline, and low insurance penetration highlight the urgent need for robust, locally calibrated tools to bridge the climate protection [...] Read more.
This paper presents the development of a high-resolution composite index to monitor and quantify climate-related risks across Italy. The country’s complex climatic variability, extensive coastline, and low insurance penetration highlight the urgent need for robust, locally calibrated tools to bridge the climate protection gap. Building on the methodological framework of existing actuarial climate indices, previously adapted for France and the Iberian Peninsula, the index integrates six standardised indicators capturing warm and cool temperature extremes, heavy precipitation intensity, dry spell duration, high wind frequency, and sea level change. It leverages hourly ERA5-Land reanalysis data and monthly sea level observations from tide gauges. Results show a clear upward trend in climate anomalies, with regional and seasonal differentiation. Among all components, sea level is most strongly correlated with the composite index, underscoring Italy’s vulnerability to marine-related risks. Comparative analysis with European indices confirms both the robustness and specificity of the Italian exposure profile, reinforcing the need for tailored risk metrics. The index can support innovative risk transfer mechanisms, including climate-related insurance, regulatory stress testing, and resilience planning. Combining scientific rigour with operational relevance, it offers a consistent, transparent, and policy-relevant tool for managing climate risk in Italy and contributing to harmonised European frameworks. Full article
(This article belongs to the Special Issue Climate Change and Financial Risks)
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