Climate change is causing substantial structural adjustments to the global economy. Several sectors, such as coal and steel, are undergoing severe problems related to the inevitable transition to a low-carbon economy, while others such as renewables and new environmental adaptation technologies are benefiting substantially. In this context, regulators are beginning to intervene on the legislation, while investors, customers and civil society are looking for alternatives to mitigate, adapt and make these issues more transparent. This article aims to analyze the impact that these changes will inevitably have on banks’ balance sheets, introducing new risks but also opportunities. The final purpose is to help banks integrate climate risks into their organizational framework and to provide guidance on the implementation of the recommendations published by the Task Force on Climate related Financial Disclosures (TCFD) within the broader Financial Stability Board (FSB) objectives and the UN Environment<\/p>\n
Finance Initiative (UNEP FI). Starting from a long-term perspective, the work suggests considering climate risk as a financial risk, overcoming traditional approaches that focus on reputational risk. This change implies the integration of climate change risk into the logic of Risk Management (Credit, Market and Operational risks) and a consequent sharing of responsibilities with the structures of Corporate Social Responsibility (CSR). The TCFD recommendations urge banks to use forward looking scenario analyzes, including stress tests, to evaluate and disseminate the “actual and potential impacts” of climate-related risks and opportunities, suggesting in particular to consider the consequences in terms of two categories of risk: physical and transition risk.<\/p>\n
Keywords: \u201cclimate change\u201d, \u201ctransition risk\u201d, \u201cphysical risk\u201d, \u201cEU taxonomy\u201d, \u201cIPCC scenarios\u201d, \u201cRCP-SSP-SPA pathways\u201d, \u201cforward looking analysis\u201d, \u201cclimate stress test\u201d, \u201cPD assessment\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
Cite: G. Birindelli, V. Palea, L. Trussoni, F. Verachi (2020), \u201cClimate Change: EU taxonomy and forward looking analysis in the context of emerging climate related and environmental risks\u201d, Risk Management Magazine, Anno 15, numero 3, Settembre \u2013 Dicembre, ISSN Print 2612-3665 \u2013 ISSN Online 2724-2153<\/p>\n","protected":false},"author":8,"featured_media":0,"menu_order":0,"comment_status":"open","ping_status":"closed","template":"","format":"standard","meta":{"footnotes":""},"portfolio_category":[99],"portfolio_skills":[],"portfolio_tags":[],"yoast_head":"\n