In conjunction with Climate Week NYC 2020, on September 22, Maxine Nelson, SVP, GARP Risk Institute and Jo Paisley, Co-President, GARP Risk Institute, hosted a virtual meeting for GARP’s chapters. They discussed some of the ways in which climate risk has far-reaching and complex characteristics that risk managers need to understand to assess the financial risks that their firms are exposed to.
Following an overview of climate risk and how it could impact companies, and in particular financial institutions, they presented key findings from GARP’s second annual climate risk survey. The research provides insights into how financial institutions are measuring and managing the risks and opportunities associated with climate change, and the challenges they are facing.
Some key takeaways from the meeting based on audience polling:
Physical and transition risk will impact all existing financial risk types, such as credit risk, market risk, operational risk, and insurance underwriting risk. Of note is that while most respondents need to be educated about both these transmission mechanisms, about a quarter of the respondents said that they only need to be educated about one of them.
Climate Week NYC 2020 provided an opportunity to raise awareness of the potential impact of climate change on an organization. The next step is education: risk managers who acquire the appropriate knowledge about sustainability and climate risk can help their organizations prepare for an uncertain future. GARP’s Sustainability and Climate Risk (SCR®) program equips professionals with specialized insights and knowledge to manage these risks. By understanding the ways in which climate-related issues impact their business, these professionals will be positioned to take advantage of the opportunities associated with managing climate change.
Here’s a link to the virtual meeting.