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Partners in Risk Management

Climate Risk Webcast

Posted on Jul 15, 2020

Our Climate Risk Webcast which took place on 13 July 2020 had been a great success.

We thank Sarah Rickard from HSBC UK Bank plc and Dr. Salomon Billeter from Swiss Reinsurance Company Ltd for their interesting contributions.

Sarah described how the banking industry has started to take action to capture and manage climate-change risk in their risk management framework. Her analysis pointed out that climate risk should be considered as cutting-edge risk, which impacts all the principal risk types and materialises through financial, as well as non-financial, risk. In addition, Sarah outlined the regulatory environment of climate risk in the UK. In particular, she referred to the upcoming climate-risk stress testing, which will cause some challenges in the areas of data and modelling.

Salomon provided insights into how climate risk is managed in the insurance sector, including a description of existing stress testing models which the banking industry could adapt. He outlined the diverse challenges of the climate-risk stress test, which arise the fact that climate risk has both a broad impact and a diverse transmission channel and a longer time horizon. Salomon also described the methodology of the catastrophe models and the liability risk drivers, which are used to model systematic risk in the insurance sector. He concluded the webinar by outlining the different approaches which can be taken when developing climate-change stress testing models.

The presentations and the associated discussions confirmed that managing climate risk is key in upcoming years and that it is important for the banking industry to begin actively managing this risk.

A recording of the webinar can be downloaded here.

Sarah Rickard's presentation on the "Integration of Climate Risk into Risk Management Frameworks" can be downloaded here.

Dr. Salomon Billeter's presentation on "Climate Stress Testing for Financial Resilience" can be downloaded here.

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