Whitepaper
Assessing the Materiality of Climate Risks
Why CROs Need to Take an ERM approach
Climate risk management is at a crossroads. Recognized as systemic threats to financial stability, C&E risks require robust frameworks akin to those for market and credit risks. However, challenges such as data scarcity and modeling complexities persist. A true ERM approach, integrating various risk types—including climate—into a unified strategy, is crucial for substantial progress.
Key Considerations for CROs
- Understand the Material Impact
- Report Aggregated Data
- Integrate Climate Risks into Credit Processes
- Develop Climate Stress-Testing Scenarios
- Assess the Impact on Cash Flows and Liquidity Buffers
The Case for an ERM Approach
Adopting an ERM framework enables financial institutions to systematically identify, assess and mitigate climate-related risks, enhancing financial stability and contributing to a sustainable future.
Discover how to effectively manage climate risks with a comprehensive ERM approach.