Climate-related financial risk regulations are firming up all around the world
The world’s central banks and regulators are watching governments create policies and promises that will cause short-term economic pain, in the name of long-term sustainability. the liquidity implications are becoming obvious, and bank reporting rules are changing. banks should follow these changes carefully to avoid being left flat-footed in the global race to net zero. […]
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 […]
Mission Zero: A report that can help banks chart their way to financing a green future
The UK’s ‘Mission Zero’ report offers banks a useful blueprint for measuring the gulf between ambition and policy. The report and its recommendations are useful in climate scenario planning, as well as in interpreting results from them. In January 2023, The UK released its assessment of its own progress towards net zero by 2050… The […]
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 […]
COP27 – What must financial firms take away?
COP27, which concluded in Egypt recently, was held at a time of rampant international energy price inflation, a land war in Europe, and against a history of increasing intransigence in specific areas of funding. Even so, some achievements of the conference are well worth noting by banks. History dealt COP27 a difficult hand to play… […]
COP27 has a challenging agenda that banks must follow carefully
November sees the 27th ‘Conference of the Parties’ (COP27) convened in Sharm El-Sheikh, Egypt. One year after Glasgow hosted the 26th edition, it is vital that banks note any (re)prioritization and the direction of travel regarding global climate ambition. Each COP has a specific vision… COP27 has laid out its vision of success, which is […]
