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Managing climate change risks: The role of governance and scenario analysis
Journal of Risk Management in Financial Institutions,
15
(1),
38-50
(2021)
Abstract
Climate-change and environmental risks, as illustrated by extreme weather events and biodiversity losses, pose a fundamental threat to humanity. Calls for action have intensified and pressures on the financial sector have significantly increased. As a result, environmental, social and governance (ESG) disclosures and risk assessment have improved. In this context, this paper highlights the crucial role of governance and scenario analysis in enhancing the effectiveness of climate-change and environmental risk management. Concrete examples are given, drawing on some results of the unprecedented ACPR pilot climate exercise, to illustrate the importance of scenario analysis.
Keywords: ESG; climate change; risk management; governance; stress testing; scenario analysis
The full article is available to subscribers to the journal.
Author's Biography
Laurent Clerc is Director for Research and Risk Analysis at the Autorité de Contrôle Prudentiel et de Résolution (ACPR). Previously, he held various positions at the Banque de France, notably as Director for Financial Stability, Director for Monetary and Financial Studies and Secretary of the Banque de France Foundation for Research. He also worked as an economist at the Bank of England, the ECB, the OECD and the Forecasting Department of the French Economics and Finance Ministry. He is a former student of the École Normale Supérieure de Cachan and of the London School of Economics. His main research fields and publications in refereed journals relate to the areas of monetary economics, financial stability and climate-change risks (publications: https://ideas.repec.org/e/pcl66.html).
Citation
Clerc, Laurent (2021, December 1). Managing climate change risks: The role of governance and scenario analysis. In the Journal of Risk Management in Financial Institutions, Volume 15, Issue 1. https://doi.org/10.69554/QMHH8100.
© Henry Stewart
Publications LLP
Publications LLP