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New methodologies to help banking industry assess physical risk and opportunities of climate change


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Sixteen leading banks convened by the UN Environment Finance Initiative (UNEP FI) and supported by climate risk advisory firm Acclimatise, have released new methodologies that aim to help the banking industry to understand and manage the physical risks and opportunities of climate change in their loan portfolios.

The ground-breaking methodologies, published in the report Navigating a new climate, support the implementation of the recommendations of the Financial Stability Board’s (FSB) Task Force on Climate-related Financial Disclosures (TCFD).

Using the methodologies banks can begin to assess physical climate risks on key credit risk metrics for climate-sensitive industry sectors. The guidance also sets out how banks can start to evaluate opportunities to support their clients in becoming more climate-resilient.  The methodologies, which were piloted for agriculture, energy and real estate portfolios, can be used by banks to assess a wide range of sectors in their loan portfolios.

These new methodologies are now available here

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