Integrating climate into market and credit risk frameworks: what’s next?

Much work has been done by banks, asset managers and insurance firms to source data, identify metrics and develop approaches for assessing climate risk in investment and lending portfolios. However, a lot still needs to be done to embed these risks into wider risk management frameworks such as credit and liquidity risk.

At the same time, some firms are beginning to view climate as a present-day market risk that needs to be integrated into short-term risk assessments.

Key discussion points include: 

• Integrating climate risk into short-term risk assessments: interactions between climate and market risk
• Do climate stress tests need to set shorter shock scenarios to feed into management decisions? 
• Integrating climate risk into credit and liquidity risk frameworks
• Translating climate risk metrics and indicators into financial impact
• Best practice and real-world examples of climate risk influencing credit decisioning 
• Tackling greenwashing: identifying investments to retain when building sustainable portfolios.

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