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Financiers face $400bn of ‘unassessed climate risk exposure’

Financiers face $400bn of ‘unassessed climate risk exposure’

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Carbon War Room (CWR) and UMAS today released research that suggests climate transition pathways pose risks to the banks that hold $400bn of global shipping debt.

“With the onset of climate policies as soon as 2023, there will be a need for significant capital investment to keep vessels competitive,” the two bodies noted in a release.

The pair urged enhanced due-diligence to be undertaken today by financiers, shipowners, and shareholders in order to deliver long-term value and avoid losses by the mid-2020s.

The 18-month research project identified that while some financial stakeholders are aware of stranded asset risks, few banks assess ship efficiency or have lending programmes in place to keep assets competitive.

Jules Kortenhorst, CEO, Carbon War Room and Rocky Mountain Institute commented: “Financiers should be future-proofing investments and preparing to harness the new opportunities decarbonisation will create. Even with $400bn in global shipping debt at stake, we have little evidence this is happening. We’ve taken the first step.”

The full report is available to download by clicking here.

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Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.

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