Decarbonisation and the Reshaping of Risk

This book presents a comprehensive and innovative analysis of decarbonisation and the reshaping of risk in contemporary financial and institutional systems. It develops a multidimensional approach that integrates finance, behavioural dynamics and governance within ongoing technological and climate transformations. The novelty of the volume lies in reframing decarbonisation as a structural reconfiguration of risk, rather than merely a regulatory or reporting challenge. It emphasises the fact that research and analysis of environmental, sustainability, and governance (ESG) dynamics are gaining centre stage in the academic sphere, but the problem of low transparency, and more specifically the lack of disclosure, is under-estimated, and the topic has gained insufficient attention to date. The book offers an in-depth description of the different approaches to transition and climate risk regulation through the critical analysis of the actions implemented by the main regulatory authorities and introduces a comprehensive analysis of climate risks and related scenarios using stress testing. It rethinks the concepts of risk, profit, and responsibility in the context of a pro-environmental attitude and adopts an interdisciplinary approach by exploring ESG issues from a quantitative, institutional, and behavioural perspective. This volume examines the transition and the costs connected with decarbonisation, focusing on the problems of disclosure and reporting, and considers the role of financial innovation and data-driven technologies in shaping transition dynamics, while developing a co-evolutionary framework linking risk, responsibility, and institutional design. The book is therefore positioned as a key reference for academics, advanced students, and researchers concerned with decarbonisation, transition risk, sustainable finance, and the evolving governance of financial and institutional systems.

Maurizio Pompella is a Full Professor (professore ordinario) of Financial Intermediaries Economics at the University of Siena, School of Economics and Management (SEM), Italy. Cristina Roxana Tanasescu is Full Professor at the Faculty of Economic Sciences, Lucian Blaga University of Sibiu, Romania, and PhD supervisor in Economics.

1. Introduction 2. Decarbonization from a Business Risk Perspective 3. From Sustainable Consumption and Production to Responsible Investments 4. The Behavioral Economics Approach to Sustainable Finance 5. ESG, The State of Art in the New Context 6. Risk Profiles and the Institutional Approach 7. Nominal Sustainability & Responsible Investment as a Co-Evolutionary Pair 8. Conclusion