Increased disclosure of firms’ carbon footprints, prudential requirements for the insurance sector, addressing possible misalignments within financial regulation and practices, and the use of financial instruments that reduce and better allocate climate-related risks would also enhance financial stability in the transition to a low-carbon economy.
On the other hand, the investment needs to hold the increase in global average temperature below 2 degrees Celsius relative to pre-industrial levels are substantial. According to recent estimates, some additional USD 600 billion per year will be needed, on average through 2030, in order to keep infrastructure investment across transport, energy, water and telecom systems consistent with the above-noted limits on global warming.