Russia’s main trading partners continue the transition to a low-carbon economy, introducing new climate regulation measures that will affect international trade in the future. Concurrently, natural hazards are becoming increasingly frequent and intense. The Russian economy is vulnerable to climate transition risks because of its high carbon intensity and to climate physical risks because of the country’s geography. Although the financial sector is exposed to the direct impacts of climate risks (e.g. loss of property in case of a disaster), their indirect influence arising from the transmission of negative effects through clients is more serious. Realisation of climate risks adversely affects incomes, asset value, and other indicators of non‑financial companies and households, which reduces their creditworthiness and entails traditional financial (credit, market and liquidity) risks to their lenders. This contagion effect might undermine overall financial stability.