On 22.09 Bank of Italy (“BoI”) published “Assessing credit risk sensitivity to climate and energy shock”', the new issue of the series “Markets, infrastructures, payment systems” (“Study”). The Study is part of a broader effort within the BoI to define the impact of transition policies on corporate performance. The impact of climate policies on credit risk has some similarity with that of the energy market disruptions that firms and households have experienced since the second half of 2021. Scope and purpose Climate change poses a threat to economic activity via several channels, e.g. owing to reduced labour and energy productivity; some extreme weather events have also drove down short-term economic growth. The biggest threat is for the most climate-exposed sectors such as agriculture, forestry, fishery, energy, and tourism. Climate change has an impact on financial institutions as well. The risks for the stability of the financial system will also depend on the climate policies and on the exposure of the different sectors of the economy to such policies. In particular, climate-change may have many effects for the financial sector. Natural disasters, in fact, by disrupting the activities of companies and households, raise their financial vulnerability and lower the value of the collateral pledged for loans. Repaying loans may become more ...