Climate Risks in the Transportation Sector

Shidonna Raven
7 hours ago
2 min read

May 2024

Photo Source: Unsplash

The transportation sector accounts for 37% of total CO2 emissions and global demand for passenger transport is expected to nearly triple by 2050. The anticipated growth in demand, coupled with an acceleration in the shift to a low-carbon economy, will create substantial challenges for the sector and the companies and communities depending on it.

While the shift to a sustainable, net-zero future is critical, closely managing physical and transition climate risks and opportunities linked with the transportation sector will be key for a smooth and just transition. Through case studies and risk management

recommendations for each risk identified, this brief aims at assisting financial institutions in effectively managing both their own risks related to their financing activities in the transportation sector and those of their clients, with the aim of accelerating the move to a sustainable financial and economic system. By helping firms mitigate risks and reduce their financed emissions, this brief can also support financial institutions meet their net-zero carbon commitments.

This resource can be used in conjunction with the climate target setting guidance for automotive sector financing for banks looking to set specific targets to reduce emissions associated with their financing of the transportation sector.

This brief is part of a series covering the following major economic sectors and their associated physical and transition climate risks. All these resources are part of the UNEP FI Risk Centre supporting members take an integrated approach to sustainability risks.

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