Planetary financial policy and the riskification of nature

Jens van ‘t Klooster and Klaudia Prodani

Review of International Political Economy, 2025, vol. 32, issue 3, 643-667

Abstract: This article puts forward a new account of the promise and potential pitfalls of recent prudential policies pertaining to climate change, biodiversity loss, and broader planetary boundaries. We describe recent developments in financial policy as a ‘riskification’ of nature – environmental degradation, as well as policies to protect nature, are conceptualised as drivers of measurable financial risk to firms or financial assets. We show that although the conceptualisation of nature as a source of financial risk fits well with the Basel Committee on Banking Supervision (BCBS)’s approach to financial policy, progress to date in riskifying nature has been mixed. Whereas climate transition risk has proven comparatively amenable to riskification, policymakers face mounting challenges for non-climate related environmental exposures. We also highlight the promise of new supervisory tools that focus on the ability of financial institutions to align with and navigate transition and adaptation scenarios, thereby partially sidestepping the need for riskification. We situate the limits to the effectiveness of these approaches in the jurisdiction-specific willingness to pursue supervisory and regulatory action, rather than their prudential focus per se.

Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/09692290.2025.2468316 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:rripxx:v:32:y:2025:i:3:p:643-667

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/rrip20

DOI: 10.1080/09692290.2025.2468316

Access Statistics for this article

Review of International Political Economy is currently edited by Gregory Chin, Juliet Johnson, Daniel Mügge, Kevin Gallagher, Ilene Grabel and Cornelia Woll

More articles in Review of International Political Economy from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().