What is a Green Swan Event?

A Green Swan event is a major climate risk on the global financial system. No single country or power can solve the problem of climate change and it’s a major inevitable risks to the entire planet. Central banks around the world need to collaborate along with corporate culture on the economic costs of climate change.

Climate change threatens to provoke “green swan” events that could trigger a systemic financial crisis unless authorities act against such risks, according to the Bank for International Settlements. Think mass migration, floods, draughts and other factors.

  • A Green Swan event is thus trigged by climate change.
  • The BIS holds a conference about this risk.

Climate change risk in the 21st century is going to become a major economic problem. The ESG movement is pressuring the financial center to be more of a leader.

Green swans are different from black swans because there is some certainty that climate change risks will one day materialize, which could endanger humanity more than financial crises, and they threaten even more complex and unpredictable chain reactions, the authors wrote.

  • Regulatory and international discussion needs to take place for us as a specs to be more resilient to Climate change risks.
  • The Financial services industry needs to be a leader to help deal with Green Swan events when they occur.

The BIS is The Bank for International Settlements. At the start of 2020 the Bank for International Settlements released a new report called “The Green Swan.” This lays out risks posed to the global financial system by climate change and the limitations of current models in quantifying potential impacts.

To learn more about Green Swan risks go here. We are literally running out of time. Traditional backward-looking risk assessments and existing climate-economic models cannot anticipate accurately enough the form that climate-related risks will take. This is because ecosystems could break down in a faster and different than anticipated way due to various cascade events.

If you think a pandemic is disruptive to supply-chains, chips and consumerism, including consumer driven economies, just wait until we get serious Green Swan events.

At the Last Futurist, we care about environmental topics and will try to cover climate change risks as well as they occur. Are you passionate about climate change? We need more columnists if you would like a place to write. Contact me on LinkedIn in a DM if that is the case.

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