Grey Rhinos and Deep Risk: How Climate Change Will Impact Financial Planning
SARPONG, P. 2021. Grey Rhinos and Deep Risk: How Climate Change Will Impact Financial Planning. In: OLAREWAJU, O. M. & GANIYU, A. I. O. (eds.) Handbook of Research on Climate Change and the Sustainable Financial Sector. Hershey, PA: IGI Global.
3 Pages Posted: 11 May 2021 Last revised: 16 Jun 2021
Date Written: May 10, 2021
Discussions on the impact of climate change within the financial services sector have mainly focused on institutional investors. Talks of climate change is all but ignored in financial planning. Financial planning, however, has a profound impact on society and can play a major role in climate change mitigation. Climate change poses an overarching challenge to financial planning and how individuals plan for their long-term goals. The financial services sector which provides the financial instruments for financial planning faces Deep Uncertainty, which threatens the stability of the sector. The environmental impact of climate change poses an additional risk on health outcomes for individuals. This chapter presents a review of disparate literature to position the risk of climate change as Deep Risk which has significant implications for financial planning. The chapter outlines how financial planners can prepare themselves, and their clients, for climate risks while contributing to climate change mitigation as well.
Keywords: Financial Planning, Deep Uncertainty, Black Swan, Green Swan, Systemic Risk, Systematic Risk, Climate Risk Portfolio, Insurance
JEL Classification: G2, G5
Suggested Citation: Suggested Citation