Climate Risk in Aviation

Climate-related financial disclosures, aimed at making the financial sector greener, are increasingly reflected in the decision-making of central banks, multilateral development banks, and various economic sectors. While mainstreaming climate-related risks into business activities is gaining momentum, the use of scenario analysis to assess these risks at the industry level remains underexplored. The project aims to develop climate scenarios that integrate transition and physical sources of climate risks for the aviation sector. Through the application of both qualitative and quantitative research methods, the project will provide a comprehensive database on all climate-related risks in aviation, while also exploring the links between transition and physical risks, and their material impacts to airports and airlines.

The research focuses on what actionable strategies can be adopted by the aviation sector to improve their climate risk management and to price climate-related risks in long-term investment decisions. It also seeks to inform policymakers on key interventions that can help the aviation industry meet net-zero transition goals while ensuring it is prepared for increasing climate adaptation challenges.