Climate Finance at Crisis Harnessing Decision-Making Power of Climate and Sustainability Finance at Today's Global Crisis Transition A. Lead structural decision at crisis by harnessing ecosystem view of climate finance: • Climate finance at crisis situation must find a strategic commonground that resonates sustainable investment and portfolio decision, while simultaneously substantiating fiscal policy and merit-based financial asset allocation, notably in advancing structural capacity across crisis-prone sectors (see discussion in the context of EU’s energy transition with implications to the crisis transition); • Cross-level structural impact is the priority in forward-looking outlook of an orchestrated socio-economic transition, notably substantive to stronger crisis governance capabilities (such as to the benefit of infrastructure development with focuses on upstream capacity and conducive enabling environment), but also achieving climate and sustainability ambition especially with the power of financial and economic incentive and the leverage of merit-based decision; B. Focus on risk-based strategy while balancing tradeoff using scenario hypotheses: • Risk and vulnerability analysis further reinforces operational and strategic capabilities of the crisis governance authority, considering tradeoffs between economic-social criteria on the one hand and security/climate vulnerability on the other, particularly with the differentiation of intrinsic versus systemic risks (i.e., inherent risk in each specific portfolio versus that in broader assessment on a cross-sectoral level), which altogether structures a governance decision-making baseline toward sustainability and resilience in the dialog of allocative efficiency (see analysis regarding macro-stability by ECB); • Forward-looking scenario hypotheses undoubtedly lies at heart, especially in overcoming multidimensional complexity at crisis but simultaneously also in driving forward meaningful whole-of-governance strategic courses required to address the challenge at hand, markedly with the implications of physical and transitional risks at different scope (see International Sustainability Standards Board) but also bilateral/multilateral global financial partnership (see OECD’s scenario analysis with hypotheses in the dynamics of global climate finance); C. Transform forward-looking progress with measurable impact on the ground: • Leadership commitment at climate causes after all matters to the ongoing structural transition in an unprecedented situation across the globe. But such imperative must make a difference particularly at a community level, for every seed of climate-smart investment only wins shared purpose across the world, once cohering constructive action on the ground, especially at the grassroots.

1. Bangkok, Thailand / Page 1 (2) Edition: June 13, 2022
Climate Finance at Crisis
Harnessing Decision-Making Power of Climate and Sustainability
Finance at Today's Global Crisis Transition
Siripong Treetasanatavorn
Sloan Fellow, Massachusetts Institute of Technology
Implications of Climate Finance at Crisis Transition:
A. Lead structural decision at crisis by harnessing ecosystem view of climate finance:
• Climate finance at crisis situation must find a strategic commonground that
resonates sustainable investment and portfolio decision, while simultaneously
substantiating fiscal policy and merit-based financial asset allocation, notably
in advancing structural capacity across crisis-prone sectors (see discussion in
the context of EU’s energy transition with implications to the crisis transition¹);
• Cross-level structural impact is the priority in forward-looking outlook of an
orchestrated socio-economic transition, notably substantive to stronger crisis
governance capabilities (such as to the benefit of infrastructure development
with focuses on upstream capacity and conducive enabling environment), but
also achieving climate and sustainability ambition especially with the power of
financial and economic incentive and the leverage of merit-based decision;²
B. Focus on risk-based strategy while balancing tradeoff using scenario hypotheses:
• Risk and vulnerability analysis further reinforces operational and strategic
capabilities of the crisis governance authority, considering tradeoffs between
economic-social criteria on the one hand and security/climate vulnerability on
the other, particularly with the differentiation of intrinsic versus systemic risks
(i.e., inherent risk in each specific portfolio versus that in broader assessment
on a cross-sectoral level), which altogether structures a governance decision-
making baseline toward sustainability and resilience in the dialog of allocative
efficiency (see analysis regarding macro-stability by ECB and in the Exhibit3
);
• Forward-looking scenario hypotheses undoubtedly lies at heart, especially
in overcoming multidimensional complexity at crisis but simultaneously also in
driving forward meaningful whole-of-governance strategic courses required to
address the challenge at hand, markedly with the implications of physical and
transitional risks at different scope (see International Sustainability Standards
Board⁴) but also bilateral/multilateral global financial partnership (see OECD’s
scenario analysis with hypotheses in the dynamics of global climate finance⁵);

2. S. Treetasanatavorn. Climate Finance at Crisis
Edition: June 13, 2022 Bangkok, Thailand / Page 2 (2)
Exhibit: Example of Climate Risk Assessment: (a) Graph Analysis (Causal
Interdependencies and Linkages) and (b) Cross-Correlation Analysis in the ECB’s
Portfolio across Credit Issuers (Source: European Central Bank³)
C. Transform forward-looking progress with measurable impact on the ground:
• Leadership commitment at climate causes after all matters to the ongoing
structural transition in an unprecedented situation across the globe. But such
imperative must make a difference particularly at a community level, for every
seed of climate-smart investment only wins shared purpose across the world,
once cohering constructive action on the ground, especially at the grassroots.
References (in appearance order):
1. See discussion of clean energy transition under the REPowerEU program of the
European Union (2022):
https://ec.europa.eu/commission/presscorner/detail/en/ip_22_1511
2. See the latest climate strategy of the European Investment Bank (2020):
https://www.eib.org/en/publications/eib-climate-strategy
3. See discussion from perspective of macrofinancial stability at the European Central
Bank (2022): https://www.ecb.europa.eu/pub/financial-stability/fsr/html/index.en.html;
Note also on abbreviation in the Exhibit as follows: Credit Institutions (CI), Financial
Corporations (FC), Governments (GOV), Households (HH) and Non-Financial
Corporations (NFCs).
4. See requirements of scenario analysis in the exposure draft of the forthcoming ISSB
standards (2022) for climate-related disclosures: https://www.ifrs.org/news-and-
events/news/2022/03/ISSB-to-publish-exposure-drafts/
5. See forward-looking scenario analysis of the climate finance in 2021-2025 at OECD
(2021): https://www.oecd.org/environment/forward-looking-scenarios-of-climate-
finance-provided-and-mobilised-by-developed-countries-in-2021-2025-a53aac3b-
en.htm