Extreme weather events such as severe droughts, heatwaves, tropical cyclones, heavy rainfall and floods are increasing in frequency and intensity due to climate change. This is amplifying the substantial physical risks they pose to humanity, nature and the built environment. Rising vulnerability to climate-related impacts is in turn raising the cost of debt for developing countries. Emergency responses to natural hazard-related disasters can also lead to a reallocation of government budgets for the provision of aid, possibly away from other priority investment areas. In light of these challenges, policymakers are increasingly considering how to ensure financial stability and climate resilience in their fiscal and economic policies and risk management practices. More traditional options employed under the umbrella term ‘disaster risk finance’ include extending insurance protection and setting up reserve funds, but an additional, more specialised, financial instrument is gaining increasing attention in this context: catastrophe bonds. […]