By Robin Hamaker-Taylor and Georgina Wade
On 29 June 2020, the UK’s Climate Financial Risk Forum (CFRF), co-chaired by the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA), published their guide to climate-related financial risk management. The guide draws on good practice examples from industry as well as guidelines set by relevant and respected industry bodies, including the recommendations of the Taskforce for Climate-related Financial Disclosures (TCFD).
The new CFRF guide aims to help financial firms understand the risks and opportunities that arise from climate change and provides support for how to integrate them into their risk, strategy and decision-making processes. As part of this, the guide considers how firms can plan for the impact of climate policies over different time horizons and assess their exposure to climate-related financial risks so that they can adapt their businesses in response.
Written by industry, for industry, this guide is based on CFRF discussions that have been convened and facilitated by the PRA and the FCA. The forum, similar to the Task force on Climate-related Financial Disclosures (TCFD), has brought together expertise from both financial firms and corporates to develop this guidance. Over the course of 2019 and 2020, the forum’s four working groups (Disclosures, Innovation, Scenario Analysis and Risk Management) have shared good practice and analysis to advance thinking on how firms can better manage the risks posed by climate change and support the transition to a net-zero carbon economy.
Each of the four working groups wrote a chapter of the final guide, and a summary document was co-produced by the FCA and PRA. The PRA and FCA have convened and facilitated CFRF discussions but the views expressed in this guide do not necessarily represent the view of the regulators and does not constitute regulatory guidance.
Access the individual chapters of the guide here:
- Guide summary
- Risk Management chapter and Risk Management Annex: list of data and tools providers
- Scenario Analysis chapter
- Disclosures chapter
- Innovation chapter
Acclimatise is proud to be featured in the Risk Management Annex: list of data and tools providers. We are a specialist advisory and analytics company, providing world-class expertise in climate change adaptation and resilience. With experience in more than 90 countries, our work plays an important role in shaping the international adaptation agenda. We work closely with corporates and financial institutions on their physical climate risk analysis, by interpreting climate science and information in the context of their own strategies, processes, capacities.
Click here for more information on Acclimatise’s TCFD-aligned disclosure services.
Click here to learn more about Acclimatise’s corporate climate risk and adaptation services.