Climate Risk: Its Implications for Financial Institutions

By John Thackeray

A featured article of our April 2020 edition of PRMIA's Intelligent Risk quarterly newsletter


The defining issue and top global emerging risk of 2020 is climate risk, which has been gaining a sense of urgency with major implications for financial institutions. Climate change can no longer be viewed in isolation as a reputational risk but must be seen and addressed as a financial risk that needs to be integrated into existing risk management frameworks. Climate risk is a “transverse” risk that can extend its reach into existing risk stripes. As climate risk manifests itself through existing risk stripes, climate change  can  also  heighten  credit  risks  for  banks,  as  demonstrated  by  the  recent  PG&E  bankruptcy.  Banks need to consider how climate-driven financial risks can be embedded into current financial risk management frameworks.


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About the Intelligent Risk

Intelligent Risk is PRMIA's quarterly publication, bringing all PRMIA members free access to knowledge and information about risk management for financial institutions as well as current information on PRMIA chapters, committees, academic partners, news and events.

Individual articles from each edition are published under our members only Risk Library resources section. PRMIA is sharing select articles from the April 2020 edition with the public. Get more articles like this by joining PRMIA today.

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