Environmental Hazards and Risk Management in the Financial Sector: A Systematic Literature Review

Breitenstein, Miriam; Nguyen, Duc K.; Walther, Thomas (2021): Environmental Hazards and Risk Management in the Financial Sector: A Systematic Literature Review, in: Journal of Economic Surveys, Vol. 35, No. 2, pp. 512-538. DOI: 10.1111/joes.12411 (Open Access)

University of St.Gallen, School of Finance Research Paper No. 2019/10

46 Pages Posted: 31 Jul 2019 Last revised: 31 Jan 2022

See all articles by Miriam Breitenstein

Miriam Breitenstein

Dresden University of Technology - Chair of Finance and Financial Services

Duc Khuong Nguyen

IPAG Business School

Thomas Walther

Utrecht University - School of Economics

Date Written: November 16, 2020

Abstract

We conduct a systematic literature review on environmental and climate-related risk management
in the financial sector. We classify the current literature into three categories: (i) the impact of
environmental concerns on financial risk; (ii) the current state of environmental risk practices
in the financial sector; and (iii) measures to assess the financial exposure to environmental
risks. We find that financial institutions can reduce their risk exposure by highly committing
with environmental responsibility and performance. Moreover, the increase in willingness to
assess climate-related financial risk incentivizes corporate managers to adopt more proactive
environmental policies and practices.

Keywords: Environment, Climate, Risk Management, Banking, Financial Institutions

JEL Classification: G20, G32, Q51, Q54, Q56,

Suggested Citation

Breitenstein, Miriam and Nguyen, Duc Khuong and Walther, Thomas, Environmental Hazards and Risk Management in the Financial Sector: A Systematic Literature Review (November 16, 2020). Breitenstein, Miriam; Nguyen, Duc K.; Walther, Thomas (2021): Environmental Hazards and Risk Management in the Financial Sector: A Systematic Literature Review, in: Journal of Economic Surveys, Vol. 35, No. 2, pp. 512-538. DOI: 10.1111/joes.12411 (Open Access), University of St.Gallen, School of Finance Research Paper No. 2019/10, Available at SSRN: https://ssrn.com/abstract=3428953 or http://dx.doi.org/10.2139/ssrn.3428953

Miriam Breitenstein

Dresden University of Technology - Chair of Finance and Financial Services ( email )

Dresden
Germany

Duc Khuong Nguyen

IPAG Business School ( email )

184 BD Saint Germain
Paris, 75006
France

HOME PAGE: http://www.ipag.fr/en/

Thomas Walther (Contact Author)

Utrecht University - School of Economics ( email )

Kriekenpitplein 21-22
Adam Smith Building
Utrecht, +31 30 253 7373 3584 EC
Netherlands

HOME PAGE: http://www.thomas-walther.info

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