Climate-Related Risks and Energy Finance

Héla Mzoughi and Sonia Arsi

Chapter 4 in Climate Finance & Accountability:A Comprehensive and Holistic Approach, 2026, pp 101-125 from World Scientific Publishing Co. Pte. Ltd.

Abstract: Climate-related risks are recognized as a significant and complex challenge that global economies are currently facing. Within such a context, our chapter tries to reconcile varying positions on climate-related risks across energy finance. In particular, we provide a general overview of their various categories and implications for the energy systems. The main findings show that the occurrence of extreme climatic events has clear implications for energy finance. Additionally, pricing climaterelated risks is still inconclusive. We recheck the empirical literature that presents the pricing of climate risk crossway asset classes and argue how investors can make portfolios that hedge against climate risk. Then, regulations and climate risk disclosure are reviewed. Next, it is critical to address the managing of climate-related risks. Finally, it is recognized that the COVID-19 pandemic significantly affected the entire climate by reducing CO2 emissions. However, critical attention should be paid to promote the SDGs’ progress.

Keywords: Climate Finance; Environmental; Social; and Governance (ESG); Climate-Related Financial Disclosures; TCFD (Task Force on Climate-Related Financial Disclosures); Corporate Sustainability; Financial Risk Management; Sustainable Investing; Climate Risk Reporting; Corporate Environmental Accountability; Regulatory Frameworks; Capital Markets and Climate Risk; Carbon Transition Risk; Physical Climate Risk; Financial Disclosure Regulation; Responsible Investment (search for similar items in EconPapers)
JEL-codes: G32 M14 Q54 Q56 (search for similar items in EconPapers)
Date: 2026
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