Banking risk management on the African frontline of climate change

There is much discussion about the physical impacts of climate change on Africa, but the central banks of this continent are well aware of, and are preparing regulations to deal with increased credit and liquidity risks created by the physical and transitional elements of global warming. Banks in the region need to pay close attention. […]

The ECB has led the way in climate guidance; now, banks need to follow it

In 2020, the European Central Bank (ECB) released its guidance for inclusion of climate change in risk management frameworks. The 2022 survey conducted by the Central Bank shone a light on where the industry is in its journey and how much further it has to go. The ECB issued guidance on how financial institutions should […]

Constructing a feasible approach to estimating climate-related credit risk

By now, including climate change within banks’ risk analysis is acknowledged as an industry need. First, though, banks need to determine exactly what is being calculated, and second, how to integrate the results. Climate change creates risks across multiple dimensions… Climate change will cost businesses, and therefore corporate borrowers, within the real economy, significant amounts […]