Climate Risk Awareness And Its Impact On Financial Stability

Climate change has emerged as a critical factor influencing global financial stability, necessitating increased awareness and proactive risk management. This research explores the significance of climate risk awareness and its impact on financial stability by analyzing the role of financial institutions, businesses, and policymakers in addressing climate-induced economic challenges. The study examines both physical risks, such as extreme weather events, and transition risks associated with regulatory shifts toward a low-carbon economy. Through a quantitative analysis of survey data, the research assesses the level of climate risk awareness among stakeholders and its correlation with financial preparedness. Findings indicate that while awareness is growing, gaps remain in financial resilience, particularly among lower-income and rural populations. The study underscores the importance of integrating climate risk considerations into financial decision-making, promoting regulatory transparency, and enhancing investment in sustainable finance. Strengthening climate risk awareness can significantly contribute to the development of adaptive financial systems and long-term economic stability.