Resource Database

This report provides an overview of conceptual issues related to climate-related financial risk measurement and methodologies, as well as practical implementation by banks and banking supervisors. According to the report:

– Climate-related financial risks entail unique features, which means that sufficiently granular data and forward-looking measurement methodologies are needed to address them.
– To date, measurement of climate related financial risks has centred on mapping near-term transition risk drivers into bank exposures. Credit risk measurement has attracted the most effort, with a lesser focus on other risk categories. Initial scenario analyses and stress tests have in many cases focused on selected portfolios or exposures for transition risks, and selected hazards for physical risks.
– Key areas for further analysis relate to gaps in data and risk classification, as well as methodologies to address uncertainties associated with the nature of climate change and the potentially longer time horizon for risks to manifest.

This report assesses nine options available to central banks to factor climate-related risks into their operational framework. This report builds on previous NGFS work on possible effects of climate change on the determinants of monetary policy and on a survey on monetary policy operations and climate change.

In 2019, the PRI commissioned a ground-breaking analysis of inevitable policy responses by governments around the world, to meet the 1.5 degrees Paris ambition, and released a paper outlining these policies. The updated IPR 2021 policy forecast is a thoroughly revised and updated set of policy forecasts, reflecting even further detailed research on current and proposed policies, with input from a global survey of policy experts. This forms the basis for a new Forecast Policy Scenario which will be published in 2021.

The questions for risk forecasting are when this response will come, what policies will be used, and where the impact will be felt. IPR 2021 forecasts a response by 2025 that will be forceful, precisely because climate policy has been so delayed across the world.

Climate change and business valuations are inextricably linked but quantifying the value of the impact has been a challenge. This guide has been developed to help finance professions bring climate change risks and opportunities into business and asset valuation calculations.

The first-of-its-kind guidance offers a five-step framework that enables investment and valuation communities to apply climate change risks and opportunities consistently to their valuations and decision making.

The guide was developed in partnership with CPA Canada, finance teams from the A4S CFO Leadership Network, global institutional investors and industry experts.

The Climate Transparency Hub (CTH) is a climate reporting resource platform created to support the climate transparency of financial institutions. Developed as part of the Life Finance Climact project, the Climate Transparency Hub is managed by ADEME and the General Commission for Sustainable Development (CGDD) of the Ministry of Ecological Transition, in collaboration with the AMF, ACPR, 2Dii, I4CE and F4T.

It is aimed at all French financial institutions concerned by the system of article 173 paragraph 6 of the TECV law (portfolio management companies, mutual societies, insurance companies, provident fund and supplementary pension), as well as banks.

The overwhelming majority of top listed companies in the UK are woefully inadequate at disclosing in corporate reporting how climate change will affect their business – with many potentially breaching the law – a new study shows.

Existing UK laws require all large companies to disclose material information about their climate change-related risks and impacts.

Clear investor demand means that companies must provide a detailed picture of how their business is positioned as the global economy shifts towards ‘net-zero’ greenhouse gas emissions, including how it will impact their strategy, long term viability and balance sheet. Company auditors must also sign off on their work.

To see how firms and auditors meet this demand, lawyers reviewed the entire FTSE 100 and the largest 150 companies on the FTSE 250, studied each company’s most recent annual report, and developed a quantitative assessment of how company disclosures match up against existing disclosure requirements.

This guide offers an introduction to what directors in the Canadian insurance sector should be considering as they engage with climate-related risks and opportunities and develop strategic plans to address climate change.

This suite of scientific factsheets aim to build financial decision-makers’ understanding about physical climate risk assessment, data needs, climate modeling and extreme events.

It is made in the framework of the research project ClimINVEST that is aimed at improving understanding of physical climate risk. ClimINVEST brings climate scientists and investors together to provide transparency on methodologies for physical climate risk assessment and develop guidance tools that inform investors’ risk management processes.

The suite of scientific factsheets are such guidance tools and they are evaluated by a selected group of financial actors prior to publishing.

This presentation series aimed at providing guidance for the financial sector dives into climate hazards and case studies on physical climate risk.

ClimINVEST is a research project aimed to improve the understanding of physical climate risk. It brings climate scientists and investors together to provide transparency on methodologies for physical climate risk assessment and develop guidance tools that inform investors’ risk management processes.

We aimed to answer the following questions: What information is available for investors? How can investors better secure the value of their portfolios against physical climate risk? Which risks require immediate attention from investors?

Audit committees are critically important to effective climate governance. While the board of directors has responsibility for oversight of the company’s strategic planning, business plan, risk management, and integrity of its public disclosures, its audit committee is commonly delegated responsibility to undertake detailed scrutiny and oversight of financial reporting processes, including the company’s financial statements. The audit committee thus has a key role in determining how the company’s strategies and financial results are communicated to investors, regulators, and other stakeholders. Given the growing direct and indirect financial impacts of climate change, directors have a duty to adopt a climate action strategy to tackle what Canadian courts have called ‘an existential threat to human civilization and the global ecosystem’.

CDSB has identified a need to support preparers in integrating climate-related matters into the financial statements. This guidance does not seek to create new accounting standards in relation to climate-related matters, but builds on International Accounting Standards Board’s (IASB) position on how climate-related matters should be integrated into financial reporting based on current International Financial Reporting Standards (IFRS) Standards.

This guidance will seek to address three main questions: Are climate-related matters relevant to financial reporting? How should climate-related matters be factored into a company’s financial reporting and what this might look like? What steps can companies take to integrate material climate-related matters into financial reporting?

This document sets out key insights into trends affecting Asian electric utilities, followed by investor expectations framed in a series of questions that investors can use for constructive engagement with the boards and management of electric utilities.

This guide builds upon the previous Investor Expectations series of guides that were developed by the Global Investor Coalition (GIC).