TY - GEN A1 - Peylo, Tobias A1 - Tvalodze, Salome A1 - Kharaishvili, Mariam A1 - Pantsulaia, Valida A1 - Mukhigulisvili, Giorgi A2 - National Bank of Georgia, T1 - Climate-related Risk Radar for Georgian economic sectors and its possible application for the financial sector N2 - One of the most pressing problems the modern world faces today is climate change. In most countries, the average annual temperature is rising in a massive an unprecedented manner (IPCC 2022). The serious consequences create risks that can be differentiated into acute (e.g., frequent and severe extreme weather events) and chronic physical climate risks, which cause major damage in various forms also for the country of Georgia. It is clear from the outset, that due to the scope of the problems some lasting destruction is inevitable. Hence climate change adaptation is as important as mitigation. In both respects, due to its pivotal role within the society and its role in the origination of the problem, economy is the main focus. As a consequence, especially those sectors most affected by and most contributing to climate change need to be transformed in a consequent and timely manner. But for this transformation to succeed, financing is needed and hence financial institutions are essential. However, from the perspective of financial institutions, the transformation also has a downside: With changing markets and framing conditions, new challenges and risks are arising, labelled as transition (climate) risks. Because in every transformation, there are those that profit and those that suffer. If individual entrepreneurs or companies face economic problems because they find themselves on the losing side of transformation, this could harm their abilities to pay back loans and hence will affect banks and MFI’s as well. Therefore, both physical and transition risks will also affect the banks/ MFI ‘s. This requires Central banks to act in order to preserve financial stability, addressing both the requirement and the practical steps to implement the consideration of especially climate risk management in banks and financial institutions. KW - Climate Risk KW - ESG Risk KW - Risk Management KW - Banking Supervision Y1 - 2022 UR - https://opus4.kobv.de/opus4-hs-kempten/frontdoor/index/index/docId/1342 UR - https://nbg.gov.ge/en/page/climate-risk-radar SP - 1 EP - 41 ER -