Risk Management
Risk Management
The resources below have been collated to provide non-executive directors with a knowledge hub. This brings together relevant climate change materials from regulators, standard setters and other content creators.
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Newly added resources
| State-of-the-art tools and data for banks to assess credit risks and opportunities from physical climate change impacts | Article discussing recent UN report, “Charting a New Climate”, which provides a state-of-the-art blueprint to support financial institutions to navigate the changing physical climate risk landscape. | 8 Sept 2020 |
Previous reports, analysis and articles
| Organisation / Publication / Author | Link | Information | Date |
|---|---|---|---|
| New York Times Brad Plumer | Rising Seas Could Menace Millions Beyond Shorelines, Study Finds | As oceans rise, powerful coastal storms and extreme high tides will be able to reach farther inland, putting tens of millions more people and trillions of dollars in assets worldwide at risk of periodic flooding. | 30/07/2020 |
| BlackRock | BlackRock approach to sustainability – Executive Summary | Report on BlackRock Investment Stewardship’s (BIS) approach to sustainability. | 08/07/2020 |
| Cervest | Climate security report: assessing business risk | The report explores the obstacles preventing organisations from addressing climate volatility and identifies how climate security can help safeguard our future. | 06/07/2020 |
| Business Green | Three quarters of UK businesses feel threatened by climate crisis | Three quarters of UK businesses feel threatened by climate crisis, yet only one in 10 have undertaken climate risk assessments and regard issue as a priority, reveals study by Cervest. | 06/07/2020 |
| KPMG Bridget Beals | How can we use the lessons learnt from COVID-19 to better prepare for climate change | More robust planning to manage climate-related impacts is crucial to prevent the systemic impact of COVID-19 happening again. | 01/06/2020 |
| KPMG Simon Weaver | Why is COVID-19 an opportunity to better understand the risks related to climate change | 1. Human behavioural bias may be limiting our current response planning. 2. Any response planning must consider the network effects of risk. 3. A globally co-ordinated response is key. | 01/06/2020 |
| McKinsey & Company | Reckoning with the overlooked business risks of climate change | Experts from the Woods Hole Research Center discuss how companies are missing the scope of mounting physical risks from climate change. | 28/05/2020 |
| Deloitte Financial Services Blog | Climate change – keeping up the momentum | Banks should give COVID-19 immediate attention but should not slow down on climate risk programmes. Article explores recent announcements made by UK regulators and offers conclusions on priority areas for banks’ climate risk management programmes. | 19/05/2020 |
| We Mean Business Maria Mendiluce | From Premiums to Greeniums | Argues that short-term private sector pandemic responses consider the longer-term play that climate change and other sustainability challenges represent. | 18/05/2020 |
| McKinsey Quarterly Jonathan Woetzel et al | Confronting climate risk | Overview of the McKinsey Global Institute (MGI) recent report ‘Climate risk and response: Physical hazards and socioeconomic impact’. | 15/05/2020 |
| World Resources Institute | Millions of People, Trillions in Property at Risk from Flooding | Aqueduct Floods, a tool from the World Resources Institute, finds that by 2030 millions of people and trillions in urban property will be impacted, annually, by riverine and coastal flooding. Investing in flood protection infrastructure now can significantly decrease the impact of that flooding. | 23/04/2020 |
| Company Debt | How is Your Business Going to be Affected by Climate Change and What Should You Do to Prepare? | Insurance giant Aon’s 2018 Weather, Climate and Catastrophe Insight Report report described an economic loss of $215bn due to weather disasters in 2018, compared to $438 in 2017. Not only did this make it the fourth costliest year on record at USD90 billion, it highlighted that the protection gap, (the portion of economic losses not covered by insurance) was 60%. | 01/02/2020 |
| Aviva | Stranded, when assets become liabilties | Projects most at risk include those with high operating costs or a high carbon intensity of production; large upfront capital commitments and long investment lead times; and a higher carbon content. These include oil sands, shale and extra-heavy oil, as well as reserves of higher-grade oil and gas in deep waters and other hard-to-access sites like the Arctic. In December 2019, US investment bank Goldman Sachs ruled out financing oil drilling or exploration in the Arctic in future, adding it would not invest in new thermal coal mines anywhere in the world. | 28/02/2020 |
| Cambridge Judge Business School Dr Andrew Coburn Chief Scientist Cambridge Centre for Risk Studies | Applications of Climate Science for Business Risk | Presentation of Cambridge Global Risk Index - Disruption Threats to Global Economy Extreme Weather as a Trigger for Other Risks to the Global Economy, see page 8. | 26/02/2020 |
| McKinsey Global Institute | Climate risk and response – Physical hazards and socioeconomic impacts | In this report, we look at the physical effects of our changing climate. We explore risks today and over the next three decades and examine cases to understand the mechanisms through which physical climate change leads to increased socioeconomic risk. We also estimate the probabilities and magnitude of potential impacts. | 16/01/2020 |
| World Economic Forum In partnership with Marsh & McLennan and Zurich Insurance Group | The Global Risks Report 2020 - 15th Edition | The World Economic Forum’s 2020 top five global risks in terms of likelihood relate to the environment and the number one risk in terms of impact is: climate action failure | 01/01/2020 |
| Financial Conduct Authority | Feedback FS 19/6 – Climate Change and Green Finance: summary of responses and next steps | Discusses the stakeholder responses received to its discussion paper DP18/8 and sets out its actions and next steps to ensure the FCA’s regulatory approach creates an environment where market participants can manage the risks from moving to a low carbon economy, and capture opportunities to benefit consumers. | 01/10/2019 |
| World Business Council for Sustainable Development | Business climate resilience: thriving through the transformation | Brings together global developments and latest thinking on climate adaptation and resilience, with particular focus on private sector climate resilience. It builds on the need for businesses to prepare for both the physical risks that are associated with climate change, as well as the associated transitional risks on the path towards a net-zero economy. | 18/09/2019 |
| Bank of England | Bank of England: Avoiding the storm: Climate change and the financial system speech, Sarah Breeden, Executive Director, International Banks Supervision | How prepared are business leaders/NEDs to assess, and accept, the significant financial risks and potential losses of global financial assets to their organizations that climate change presents? | 15/04/2019 |
| Bank of England | Climate Change | This page on the BoE’s website details the work the Bank is carrying out ongoing to assess and respond to climate-related financial risks. | 16/06/2017 |
| Clyde & Co | Climate change: Liability risks for businesses, directors and officers. The coming wave of litigation. | Examines how assessments of climate risk, resilience and the opportunities created by the transition to a low-carbon economy and adaptation to climate change are being increasingly integrated into business decision-making. | 29/03/2019 |
| Schroders | The forgotten physical risks | This analysis examines the implications of the physical risks of climate change for companies and investments. | 01/08/2018 |
| Partnership for Carbon Accounting Financials | PCAF-Enabling financial institutions to assess and disclose greenhouse gas emissions | Partnership for Carbon Accounting Financials offers information on measuring financial emissions in order to manage risk and identify opportunities associated with greenhouse gas emissions. | 01/12/2015 |