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Climate Risks and Financial Markets: A Narrative Literature Review
[Risques climatiques et marchés financiers : une revue narrative de la littérature]

Author

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  • Nouha Belmahi

    (UIT - Université Ibn Tofaïl)

  • Khaoula Jabari

    (UIT - Université Ibn Tofaïl)

Abstract

This paper explores the critical intersection between climate change and financial systems, examining how climate risks are increasingly becoming central to financial market stability through a narrative review of existing literature. As climate hazards continue to cause widespread disruptions – such as droughts, floods, and global temperature irregularities – the role of financial markets and institutions in addressing these challenges has come under scrutiny. This literature review seeks to shed light on how climate risks are classified, identify the key drivers of these risks, and evaluate potential policy frameworks that can mitigate these risks. By synthesizing findings from existing research, this review aims to highlight the urgency of integrating climate considerations into financial decision-making processes. This paper contributes to the ongoing discourse on sustainable finance by offering insights that inform the design of resilient financial strategies to address climate-related challenges. Keywords: Financial Markets, Sustainable Finance, Climate Risks, Physical Risks, Transition Risks. JEL Classification: G10, G56 Paper Type: Theoretical Research Résumé : Cet article examine l'intersection essentielle entre le changement climatique et les systèmes financiers, en analysant comment les risques climatiques occupent une place croissante dans la stabilité des marchés financiers, à travers une revue narrative de la littérature existante. À mesure que les aléas climatiques – tels que les sécheresses, les inondations et les anomalies de température à l'échelle mondiale – entraînent des perturbations généralisées, le rôle des marchés financiers et des institutions dans la gestion de ces défis suscite un intérêt croissant. Cette revue de la littérature vise à clarifier la classification des risques climatiques, à identifier leurs principaux déterminants et à évaluer les cadres politiques susceptibles de les atténuer. En synthétisant les résultats des recherches existantes, cet article met en évidence l'urgence d'intégrer les considérations climatiques dans les processus de décision financière. Il contribue ainsi aux débats sur la finance durable en apportant des éclairages susceptibles d'informer la conception de stratégies financières résilientes face aux défis climatiques. Mots clés : Marchés financiers, Finance durable, Risques climatiques, Risques physiques, Risques de transition. Classification JEL : G10, G56 Type du papier : Recherche Théorique

Suggested Citation

  • Nouha Belmahi & Khaoula Jabari, 2025. "Climate Risks and Financial Markets: A Narrative Literature Review [Risques climatiques et marchés financiers : une revue narrative de la littérature]," Post-Print hal-05012159, HAL.
    • Handle: RePEc:hal:journl:hal-05012159
    DOI: 10.5281/zenodo.14990428
    Note: View the original document on HAL open archive server: https://hal.science/hal-05012159v1
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    References listed on IDEAS

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    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)

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