Climate change presents challenges which are new, significant and complex.
Bank Boards must act now in order to ensure the financial resilience of the bank in the medium to long term, meet new and evolving stakeholder expectations, and harness opportunities created by the transition to a lower carbon economy. Boards must establish a strategy and risk appetite which accommodate and reconcile both the risks and opportunities arising from climate change and the transition to a greener economy.
Moreover, Boards must ensure that the strategy and risk appetite are reflected in, and supported by, the bank’s risk management, culture and governance structures. This short document sets out some of the key themes bank Boards should consider as they seek to navigate this difficult environment and meet regulatory expectations.
These themes are explored in further detail in our report Climate change and banks | Questions Boards should be asking.