
If you are a Risk.net subscriber you are entitled to 20% off your Risk books purchases. Please email enquiries@riskbooks.com for more information.
As part of your Risk.net subscription you are entitled to 20% off all of your Risk Books purchases. If you would like to place an order please email enquiries@riskbooks.com
Climate-Related Financial Risk: Arguments, Analytics and Regulations
Discipline: Regulation, Investing, Operational Risk
First published:
ISBN: 978-1-78272-448-3
A hard copy of this book will shortly be available to order by clicking the ‘buy now’ button.
In the face of an ever-evolving climate landscape, Climate-Related Financial Risk: Arguments, Analytics and Regulations provides a critical resource for financial professionals aiming to understand and mitigate the profound implications of climate change on the financial industry.
Sergio Scandizzo and Tony Hughes take readers on a comprehensive journey that delves into the multi-faceted aspects of climate-related financial risk. They offer a thorough analysis of current climate scenario and stress-testing methodologies, and of regulatory expectations and essential tools for effective risk management.
This book provides guidance on what to look for in scenario-based stress-test reports, enhancing financial practitioners’ ability to critically assess such documents. Each type of financial risk – credit, market, liquidity and operational – is thoroughly examined in the context of climate change, with practical guidance on modelling and mitigation strategies.
Additionally, the authors consider the motivations and mandates of regulators, and discuss current and future regulatory landscapes. They offer strategic recommendations for aligning financial institutions with evolving regulatory expectations and for building resilient financial systems.
Contents
Acknowledgements
Foreword
Preface
Introduction
Regulator motivation and aims
Scenarios
Two underappreciated climate risk topics: Exposure at default and asset valuation
Assessing the available evidence related to consumer credit risk
The modelling of climate-related financial risk
Credit risk – Probabilities of default models
Climate-related loss given default
Market risk
Liquidity risk
Operational risk
The (limited) power of disclosures
Financial regulators’ climate mandate should be formalised
Where to for climate risk regulation?
Conclusions: Using finance to drive climate solutions
References