The Climate Financial Risk Forum (CFRF) has published today a second round of guides to help financial firms manage climate-related financial risk.
The CFRF is chaired jointly by the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA), reflecting the importance of climate change to their respective strategic objectives.
It revealed the publication focuses on risk management, scenario analysis, disclosure, innovation and climate data and metrics.
The risk statements, online scenario analysis tool and the climate metrics dashboard have been designed to enable firms to overcome the challenges they have encountered in these areas.
Sam Woods, CEO of the PRA, said: “The contribution provided by the forum is based on the development of best practice for industry, by industry.
“Building on the excellent foundation provided by the 2020 guide, the papers published today provide practical guidance on a multitude of issues to help firms manage the financial risks generated by climate change. These risks are unique and demand an ambitious and strategic response from firms, and the material published today should aid this effort.”
Nikhil Rathi, chief executive of the FCA, added: “These guides will help firms overcome some of the difficulties they’ve faced. Importantly, they also focus on innovation, so financial firms can see the opportunities, as well as challenges, from more effective climate-related financial risk management.”
The five CFRF working groups have published a total of 10 deliverables which can be found online.