Jakarta, July 1 -- Climate change is increasingly dictating global investment decisions as investors reckon with the transition and physical risks it brings, according to the Acting Director General of Financial Sector Stability and Development of the Finance Ministry, Herman Saheruddin.

He stated that those transition risks rise as countries race to adopt green technologies, enforce stricter carbon regulations, and shift consumer preferences toward sustainable products.

"These developments affect investment decisions, trade competitiveness, financing needs, fiscal revenues, and ultimately financial sector stability," Herman Saheruddin said here on Tuesday.

Meanwhile, the physical threats of climate change include floods, droughts, ris...