Climate finance, risk and uncertainty modelling

Since the Paris Agreement in 2015, climate change progressively became a strategic issue for financial institutions, supervisors, and regulators. Compared with traditional academic problems in finance, factoring in climate change comes with addressing specific features that do not easily fit with usual quantitative approaches and necessitate new developments: long time horizons, unprecedented events, systemic patterns, chaotic dynamics, uncertainty, irreversibility, endogeneity, policy jumps, just to name a few. Such a conundrum provides the research community with a new impetus to foster transdisciplinary collaborations, through the various expertise and approaches coming from finance, economics, mathematics, numerical and climate sciences. Committed to this endeavor, the Chair Stress Test, Risk management and Financial Steering, hosted by Ecole polytechnique convenes its third international workshop on climate finance, risk and uncertainty modelling this spring. For 3 days, the broad climate & finance research community will gather in Paris, to share progress related to the new questions posed by both practitioners and regulators, such as climate-related financial risk modelling, climate stress testing, or asset valuation.