Recognition, but not acceptance, of temperature overshoot may become a necessity for investors, companies and policymakers.
A new report highlights the importance of asset owners stress testing investments in the face of rising demand for resources.
Existing capability and regime gaps “create uncertainty” over whether financial institutions are adequately capitalised for future climate-related losses, according to the Bank...
Climate risk analysis typically entails the development of scenario-based stress tests for assessing bank solvency and liquidity, using bank level data.
60% of banks don’t have a climate risk stress testing framework; only 20% consider climate risk when granting loans.
Principles for banks and financial supervisors aim to strike balance between improving practices and providing common baseline.
Without early action, the UK’s largest banks and insurers would suffer climate-related losses worth US$418 billion by 2050.
Greater scope and depth needed to keep pace with demand for more holistic approaches to climate risk management by banks and investors.
Proposed framework identified four elements of climate risk that may adversely impact clearing houses and intermediaries.
Defaults in thermal power, steel and cement sectors may increase if companies in those sectors do not shift to low-carbon alternatives.
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