Navigating financial stability through the dual challenges of climate change and pandemics

Before the COVID-19 pandemic, financial institutions had started integrating climate risks into their operations, fostering sustainable finance through green policies and disclosure requirements. However, with the onset of the pandemic, strategic focus necessarily pivoted toward immediate crisis management. This shift inadvertently relegated the imperatives of climate risk to a position of lesser priority and reinforced investments in high-carbon sectors, reinforcing the ‘carbon bias’ in global finance. Research highlights the need for a joint strategy addressing climate change and pandemic impacts on financial markets. A coordinated response to these interconnected challenges is essential for the resilience and sustainability of the global financial system, which necessitates the alignment of crisis management with environmental sustainability efforts.