Multivariate Regression Analysis of Investments by Banks in Fossil Fuel Sectors to Predict Climate Change Consequences

Abstract

Banks are impacted by climate change and also play an important role in combating climate change. This paper presents a regression analysis of investment by banks in fossil fuel sectors. Using data from the top 60 banks worldwide, we use multivariate regression to show that the consequences of climate change are related to the investment by banks in fossil fuels, and predict seven different consequences for the next five years. The validation of the model shows that this model is appropriate to predict the consequences from the investment in fossil fuel sectors with Mean Squared Error near to 0 and R-squared score approximately 1 for all consequences.