Effects of climate change extend far beyond the environment, with impact on everything from international security to healthcare and the economy. Many industries, including banking and finance, are changing the way they operate and are preparing for a more environmentally sustainable future.
As climate change impacts biodiversity and increases the prevalence of natural disasters, environmental changes risk destabilising the progress of the economy.
A new set of risks are emerging from the impact of climate change. These risks can be divided into two categories; physical risks and transition risks. Physical risks are environmental events like floods or storms, whereas transition risks arise from changes in policy and new technologies, such as the growth of renewable energy.
For the financial sector, climate change represents challenges – but also opportunities.
Investment in green alternatives presents a huge opportunity for financial services. As we move closer to emissions target deadlines the demand for new, environmentally friendly technology, processes and services will increase.
Schemes like the COP26 Private Finance Agenda – an initiative that helps private finance support the global economy transition to net zero – are helping organisations to better understand the link between the environment and the economy and consider climate change in their strategic plans.
As well as responding to regulatory pressure, experts believe that it is a commercial imperative for the financial sector to invest in the green agenda and help to fund the green innovations of the future. According to Dr Steve Cohen, Director of the MSc Sustainability Management at Columbia University, environmental protection itself contributes to economic growth through the creation of new industries, products and jobs.
Banks and financial institutions are key in responding to the risks and opportunities posed by climate change. Although regulation increasingly requires banks to manage climate risk, many financial services still have a long way to go before they have fully incorporated climate change into their growth strategy.
To secure a stable and sustainable future – we all have a responsibility to act. This responsibility is far reaching, from ethical consumerism and household recycling through to the strategic decisions of large corporations.
Through an Applied Economics online MSc, you can develop the key skills and engage with frameworks which help you solve some of the biggest challenges facing financial sectors.
“Due to applied nature of this economics degree, this course is perfect for people who have had a first job or graduate training in an area that isn’t economics. For example, those who have studied business studies, law, psychology, or other courses with some element of numeracy, will find this course particularly beneficial. The skills offered on this course will give you the confidence to switch career track, whether you’re looking to get involved in economics research or work for an economics think tank.”
— Dr. Simona Montagnana, Course Director
Graduates realise their career potential in a range of roles, including investment banking, risk analysis, market research, government policy and many others. As well as providing the teaching and experience you need, our tutors can help you pursue your goals and develop your understanding of how to approach challenges you are ambitious to tackle.
To find out more visit www.bath.ac.uk