Scenario Analysis: Guidance for Risk Professionals

Hear from members of the UK’s Climate Financial Risk Forum Scenario Analysis Working Group, as we review useful tools and resources that risk professionals should be aware of, and explore key lessons from the Bank of England’s Climate Biennial Exploratory Scenario.

In this extended webcast, we will discuss the most current outputs from the UK CFRF’s Scenario Analysis Working Group, of which GARP has been proud to serve as secretariat since it was established in 2019.

In this session we will provide an overview of these outputs, including scene setting that draws on insights from GARP’s deep dive on scenario analysis in financial firms. We will then focus on the lessons learnt from the Bank of England’s Climate Biennial Exploratory Scenario, in a report by the Centre for Greening Finance and Investment. And we’ll hear from those involved in the other main outputs, which include: 

• A guide on scenario analysis for banks
• A physical risk underwriting guide
• A guide on climate litigation
• A guide for asset managers
• Lessons learnt from CBES

We will also provide an update on other valuable resources, such as an online scenario analysis tool and a database of key scenario analysis providers. 

Speakers

Ben Carr

Analytics and Capital Modelling Director, Aviva

Ben Carr leads the multi-disciplinary project team at Aviva working on the development of scenario analysis to support the development of disclosures consistent with the recommendations of the Taskforce on Climate Related Financial Disclosures. He is also a member of the joint PRA-FCA Climate Financial Risk Forum Scenario Analysis Working Group. 

He joined Aviva from the Prudential Regulation Authority at the Bank of England in 2011, where he led the UK Internal Model Approval Process (IMAP) in preparation for the implementation of Solvency II. Before that, he worked at the Insurance and Pensions Unit at the European Commission, where he was heavily involved in the drafting and negotiation of the Solvency II Framework Directive as well 3rd country dialogues with other major insurance markets including the US, Japan, Switzerland, and Bermuda.

Jo Paisley

President, GARP Risk Institute

Jo has worked on a variety of risk areas at GRI, including stress testing, operational resilience, model risk management and climate risk. Her career prior to joining GARP spanned public and private sectors, including working as the Director of the Supervisory Risk Specialist Division within the Prudential Regulation Authority and as Global Head of Stress Testing at HSBC.

Dr. Nicola Ranger

Executive Director of Systemic Resilience, Environmental Change Institute (CGFI)

Dr. Nicola Ranger is Director of Climate and Environmental Analytics at the UK Centre for Greening Finance and Investment (CGFI), Executive Director of the Oxford Martin Programme on Systemic Resilience, and Senior Researcher at the Smith School of Enterprise and the Environment.

She also holds multiple advisory roles, including as a Senior Advisor for the World Bank, a member of the European Commission High Level Expert Group on Sustainable Finance in Low and Middle Income Economies, an Academic Visitor at the Bank of England and a member of the Financial Systems Thinking Innovation Centre of the Institute and Faculty of Actuaries. Nicola is also Visiting Research Fellowship at the Grantham Research Institute of the London School of Economics and Political Science.

Paul Barrett

Chief Risk Officer, AIG UK

Paul Barrett is Chief Risk Officer for AIG UK. He is also the designated ‘Senior Manager’ for Climate Change Risk. Paul reports jointly to the Board of AIG UK and Fabrice Brossart, CRO, GI International. Paul’s team is responsible for the Risk Governance, ORSA, Stress Testing, Risk Register, Risk Appetite & Limits and Operational Risk processes. Paul also works closely with the Group in helping to develop AIG’s Climate Strategy. Previously Paul was Assistant Director, Solvency II at the Association of British Insurers (ABI). Prior to that Paul worked in Policy at the Financial Services Authority.

Chris Faint

Head of Climate Hub Division, Bank of England

Chris has responsibility for developing and implementing the Bank's strategic approach to climate change across all of its policy operations. He has been particularly focused on the PRA’s supervisory approach to addressing the financial risks arising from climate change, the development of climate scenarios and the Bank's climate scenario analysis exercise (the CBES).

Phil Cliff

Former Head of Climate, M&G Investments

As Head of Climate at M&G Investments, Phil led the climate transition plan including activities such as: climate target setting and commitments; the Net Zero Investment Framework; Climate risk modelling; Thermal coal transition plan; TCFD reporting; supporting the response to the Bank of England’s CBES stress test; and producing thought leadership research on climate. Prior to this role, Phil integrated ESG into the investment process as a Portfolio Manager, and has 20 years of experience in the asset management industry.   

Phil has been Co-Chair of the FCA’s Climate Financial Risk Forum Asset Management working group, as well as being active on IIGCC and UK SIF working groups to develop best practice and shape policy.

Marek Piskorz

Climate Risk Scenario Analysis & Stress Testing Lead, Lloyds Banking Group

Marek Piskorz is risk professional with over 25 years leadership experience in the financial services sector and is passionate about a just transition to a sustainable future. At Lloyds Banking Group, Marek is leading climate risk embedding and climate capital and has been engaged in the Bank’s climate risk response since 2019. Marek held a key role across the delivery of the CBES and represented the Bank on external industry working groups. Since the CBES, Marek has continued to represent the Bank in the industry’s efforts to enhance climate risk capabilities, including being a lead author of the 2022 edition of the CFRF Scenario Analysis Guide for Banks.