ANNOUNCEMENTS
Capital must be reallocated away from carbon-intensive innovations and toward new low-carbon ones in order to achieve a low-carbon economy. Investors use the financial markets as a reference point when making investment choices, and they play an important part in this process. Currently, climate change-related hazards are being overestimated by financial markets leading to carbon-intensive economic activity as a result of this slowing the decarbonization economy is hampered by such biases. The policies of central banks have a significant impact on financial market pricing, which in turn affects how capital is allocated. Asset acquisition programs and collateral regimes depend heavily on the risk assessment of the financial markets. Financial service sectors are also prone to climate threats if they underestimate it and by allocating funds towards low carbon investments, the financial markets' biases are reinforced, and carbon emissions are firmly locked in. The ability of central banks to accurately evaluate risk cannot be understated. All risks must be considered, including climate change concerns, for the successful execution of monetary policy, whether via asset purchases or credit operations. An important role in the effectiveness of central banks is even more necessary given the present structure and composition of their balance sheets affected by climate-related risks. The monetary and fiscal policy operations should properly represent climate threats and one way to get started in this direction is by creating environmental risk metrics by the FSS of the country that is suitable for identifying organization-specific climate-related risks. Secondly, the FSS needs to include such measures into their asset acquisition plans and collateral frameworks. Therefore, the overall study has been based on examining the impact of risk factors caused by climate change and their impact on the financial service organization for digging deep into the area.
Keywords: Climate-risks, Physical climate change, financial firms, global economy, economic growth, Task force on climate related disclosures.
