The 2023 Climate Risk Landscape: Technical Supplement – United Nations Environment – Finance Initiative (unepfi.org)
https://www.unepfi.org/themes/climate-change/2023-climate-risk-landscape-technical-supplement/Latest technical supplement, in addition to their other climate risk guidance, published by UN Environment Programme Finance Initiative looking at various vendors and their climate risk tools using a dummy portfolio pilot exercise with underlying assumptions of models, and some concluding thoughts on maxmising insights from the exercise and implications/challenges for integrating climate considerations into investment process and decisions
Overview of paper
Understanding the underlying assumptions and definitions used in climate risk assessments is vital for financial institutions integrating climate risk analyses into their operations. In order to help financial institutions accurately interpret the outcomes of climate risk analysis' and make more informed decisions based on them, UNEP FI has developed a technical supplement to the 2023 Climate Risk Landscape Report.
This supplement presents a comprehensive analysis of climate risk assessment outcomes from multiple vendors, offering valuable insights into the impact of a transition to a low-carbon economy and climate risks on financial institutions' portfolios. Based on a dummy portfolio, it showcases the importance of ensuring the long-term resilience of the portfolio and considering both transition and physical risks. It also identifies data availability as a significant challenge for vendors in delivering more precise analytics and looks into the various strategies employed to address data gaps
https://www.unepfi.org/themes/climate-change/2023-climate-risk-landscape-technical-supplement/
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James Doyle
Director, Green Finance, Investment Management
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