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 […]
The US government is picking up pace on climate change, and banks’ risk departments should follow suit
Banks struggling to create economic scenarios to replicate climate pathways ought to review the recent Whitehouse whitepaper on how they are incorporating climate change into their own budget forecasting. This may prove invaluable for evaluating their own potential climate-related credit costs and avoid future liquidity issues. The US government has been more active in the […]
Avoiding bank liquidity risks arising from climate change
Recent problems at Credit Suisse, Silicon Valley Bank and Signature Bank have rekindled market fears around liquidity and stability within the banking sector. It is worth using this moment to consider how destabilizing climate change may be to the sector. Banking liquidity is defined in highly specific ways… Specific liquidity ratios exist that serve as […]
Emergent best practices in climate change risk management – Bringing banks to the fore
Banking’s approach to climate change, from the philosophical design of stress tests, through inclusion in risk management frameworks, to stakeholder reporting, is firming up against a backdrop of a truly international conversation about the industry’s role in the fight against this existential crisis. INTRODUCTION Welcome to the third e-book, Jaded Horizon, a collection of the […]
2022 – A year of change in climate change risk – A banking view
2021 ended with hope of a revitalized fightback against climate change. In the end, governments saw a year of inflation, European war, and struggles to regain pre-pandemic momentum. Central bankers, however, made significant climate progress. Banks need to follow these regulatory propositions carefully as they are likely to dominate the coming years. The Basel Committee […]
Banks Need Climate Risk Scenarios to Work through The Uncertainty Of Bonn
The Recent Un Climate Meetings in Bonn did Little To Remove Uncertainty from the Needed Green Transition, but They did Highlight the Need for Banks to Prepare for a Number of Possible Outcomes. Bonn, the bridge between Scotland and Egypt… The June UN Framework Convention on Climate Change (UNFCCC) climate convention in Bonn was both […]
System thinking around tipping points is needed for banks’ climate risk strategies
Climate pathways are a mix of adaptation and mitigation. Unexpected physical impacts and positive feedback loops will dictate prioritization of policy rollout. Climate pathways are built on a range of predictive models… Scientists engaged with climate change have been building effective potential climate pathways since the early 1990s. These are collated and curated by the […]
Climate change disclosures leave banks exposed
Business potential is being ignored In 2021, the world is focused on climate change, with the physical impacts of the Anthropocene wreaking havoc across the world, including central Europe and North America, with ‘once in a century’ floods and fires becoming regular news items. Governments and scientists around the world have identified potential pathways and […]
