Climate risk managers debate role of client transition plans
Banks hope for guidance on whether to include changes in client behaviour in long-term scenarios
Risk managers are grappling with how to incorporate client transition plans into their projections for potential losses due to climate change – or even whether to include them at all.
Benjamin Wong, head of portfolio analytics in the risk management group at Singapore’s DBS Bank, described as “high-level” the typical climate risk scenarios like those designed by regulators’ Network for Greening the Financial System (NGFS). Consequently, banks have room for a huge range of different assumptions
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