I recently submitted an article to Responsible Investor on the similarities between the sub-prime fallout and the climate change crisis. The article, Sub-Prime and Carbon: An Eerie Similarity, covers why banks may be failing to account for underlying risks to a huge class of assets, with tremendous repercussions for the global economy going forward.

While the banking sector itself is not a big emitter of greenhouse gases that contribute to global warming, it is the primary financier of industries that are the major emitters. As regulatory controls and market prices are put on these emissions, this will have a tremendous influence on how banks price securities, assess credit risks and make future investment and lending decisions. At the same time, banks face new opportunities to engage in carbon trading, develop new climate-focused products and services, and invest in the emerging clean technology sector.

To read the article on Responsible Investor, please visit here.