Oliver Wyman Designs New Climate Change Methodology With UN And 16 Banks

Oliver Wyman and Mercer helped the UN and 16 banks develop a report titled, “Extending Our Horizons: Assessing Credit Risk and Opportunity in a Changing Climate.” With Oliver Wyman and Mercer’s guidance, banks can become more transparent and better manage climate-related risks and opportunities in line with the Task Force on Climate-related Financial Disclosures (TCFD).

“Through this highly collaborative effort of scientists, risk practitioners and sustainability experts, we have set forth an innovative methodology that will serve to underpin enhanced climate-risk aware decision making and resource allocation,” said John Colas, Oliver Wyman Partner and Vice Chairman, Financial Services Americas.

This report is the first output of the collaborative process over the past 10 months, and is designed to:

• Build upon existing risk assessment expertise, procedures, and models already used by banks
• Enable informed assessments of how risk exposures – and new potential opportunities – might develop in the future, under various climate mitigation scenarios
• Allow institutions to examine risk and opportunities across a range of geographies and sectors
• Provide longer-term insights that go far beyond the usual stress-testing horizon of 2-3 years

The weekly magazine of the energy daily Quotidiano Energia covered the report in a story titled, “Finance and climate change: a methodology for a better understanding” and includes an interview with Oliver Wyman partner, Claudio Torcellan.

A GreenBiz article titled, “This U.N. guide aims to make it simpler for banks to talk about climate risks,” outlines the framework of the risk management model released in the first output.

Environmental Finance covered the report in a two-part story titled, “Banking on changing climate?” Part 1 of this feature examines the pressure on banks from regulators to manage climate risk, while Part 2 of this feature explores physical and liability risks.

To read the press release, click here.

To download the report, click here.