Irene Monasterolo

Irene’s research contributes to analyse the role of finance in climate change mitigation and adaptation, and the conditions for finance to enable or hinder the low-carbon transition. Irene co-developed the climate stress test of the financial system, which introduced the first framework to translate climate scenarios into adjustment in financial valuation and risk metrics for investors, considering network effects. The climate stress-test includes the Climate Policy Relevant Sectors (CPRS), a science-based classification of activities’ exposure to transition risk applied by several financial supervisors. Irene has also co-developed the EIRIN Stock-Flow Consistent macro-financial model to analyse the impacts of climate physical and transition risks, and of green finance policies in the low-carbon transition. EIRIN has been applied by the World Bank to assess compound climate and pandemics risks, by the European Central Bank (ECB) to assess the double materiality of climate risks in the euro area, by the G24 and V20 countries to assess climate risk on sovereign financial stability, and currently in the Network for Greening the Financial System (NGFS)’s short term scenarios. Irene’s work has been published in top journals including Science and Nature Climate Change. Irene has collaborated with leading financial institutions, including the World Bank, the ECB, the European Insurance and Occupational and Pension Authority, the European Banking Authority, the Monetary Authority of Singapore, on climate financial risk disclosure and risk assessment. Irene is now collaborating with the NGFS to develop its short terms scenarios; with the European Stability Mechanism to mainstream ESG and climate risk assessment into sovereign supervisory practices; and with DG REFORM and IVASS in the analysis of and solutions to the climate insurance protection gap in Europe. Irene is associate editor at Ecological Economics. She is CEPR Research Fellow in the Climate Change and Environment programme, fellow at the Institute Louis Bachelier and at SUERF, member of the CEPR European Finance Architecture Research Policy Network, and member of the Task Force on climate, development and the IMF.