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Disclosures suggest financial institutions are underestimating their climate-related risks. Some banks, asset owners, asset managers and insurance companies have not yet identified risks in their financing portfolios, which will be of a greater magnitude than those in their own operations. To continue to thrive, financial institutions will need to align their portfolios with a net zero carbon world. Financial institutions can create a feedback loop to de-carbonize and enhance resilience of the economy as a whole; engagement with portfolio companies is a key part of this.
