To my knowledge, to date few if any intermediaries have been explicit about this potential trade-off. If not addressed, this ambiguity might represent a serious obstacle to the financial system’s contribution to the fight against climate change and to an effective approach to transition risk management.
Second, a multi-pronged strategy should put non-financial companies at the center, beginning with the large ones and those with high emissions, prompting them to adopt ambitious and credible transition plans. This choice rests with shareholders; public policies should encourage them via incentives and/or penalties; financial intermediaries can also play a role on this front. The European legislation does adopt such a multi-pronged approach.