Climate Change Risks Hidden within Financial Institutions’ Balance Sheets
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The world has become increasingly aware of the mounting dangers posed by climate change. Historically, financial institutions have approached climate change through the lens of Corporate Social Responsibility (CSR). Climate risk assessments have often focused on managing impact of an institution’s operations and financings on the environment, considering the bank’s responsibilities as a “corporate citizen”, and by extension, aiming to safeguard the institution’s reputation. With increasingly high financial stakes and growing external pressures, the pure CSR approach is no longer sufficient. Climate change has become a financial risk and must be treated as such.
This course has been designed for staff members of financial institutions, micro-prudential and macro-prudential authorities who wish to understand the risks that climate change may pose for them. In addition to providing topical content and practical tools, this course will be a platform to stimulate exchange and debate between public officials and private practitioners.
This course focuses on the risks that climate change poses to the financial services sector. We will not only examine how the risk landscape has been altered by climate change, we will review practical approaches for quantifying their impact and discuss best practices for integrating climate risk into the risk management framework. Course participants will discuss how to approach risk disclosure and build transparency around climate risks.
- Overview of climate related financial risk (e.g., case studies, risk policy)
- Impact of climate change on the financial sector
- Climate risk mitigation
- Quantification of climate risk (e.g., risk scenario building, transition risk, physical risk)
- Embedding of climate-related considerations into risk management frameworks (risk appetite, underwriting, limits etc.)
- Climate-related disclosure practices
What you will learn
- You will get an understanding of how the financial sector is exposed to the different implications of climate change (from sea level rise to a carbon tax) and how your organization or the organisation(s) you are supervising should be adapting
- You will learn how to define and leverage climate scenarios to quantify their potential financial impacts on financial institutions
- You will learn how these risks can be incorporated into an institution’ risk management framework and how risk management approaches can be adjusted to capture climate risks
- You will learn industry practices for disclosing and supervising climate related financial risks
How the course will work
Total course length: 15 hours.
A certificate of attendance will be provided to all participants after the course.
The course will be conducted over 3 days, beginning with one half day, followed by a full day, and concluded in a final half day. The first day will include a dinner session with a guest speaker, and the second day will have a group social activity in the evening. The course will include case studies that illustrate climate risks being realized, as well as practical exercises to walk through quantification models.
The course will be immediately followed by a Chatham House Roundtable entitled ‘Integrating Climate Risks into Macro-Economic Models’, which will take place on 30 October 2019 from 3:00 to 5:00 PM. Participation in the roundtable is optional.
Over the course of the three course days, participants will benefit from multiple networking occasions, including a wine tasting and a dinner session with a guest speaker, held at the end of the first day in historical Villa Schifanoia. On the second day, participants will be offered a guided tour of the history of banking and finance in the city of Florence.
This course has been designed to foster active involvement of course participants. As part of a small class, they are encouraged to cultivate a broad perspective and are required to actively contribute to the exchanges and discussions. Each participant is expected to bring into the course her/his own specialist area of competence and unique perspectives.
The course will be conducted strictly under Chatham House Rules: “when a meeting, or part thereof, is held under the Chatham House Rule, participants are free to use the information received, but neither the identity nor the affiliation of the speaker(s), nor that of any other participant, may be revealed“.
Meet the instructors
Stefano BattistonStefano Battiston is SNF Professor of Banking at the University of Zurich. He is a leading scholar in the field of network models of systemic risk and sustainable finance. He has made advances in the scientific understanding of the relation between financial interconnectedness, complexity and risk. He has also directed a new and growing stream of research on climate-related financial risk. He has co-authored 50+ publications including on top journals such as PNAS, Nature Communications, Nature Climate Change and Management Science. His scientific background in complex systems, combined with 15 years of research in economics and finance, put him in a unique position to understand policy issues both from a quantitative and holistic perspective. He has also been coordinating several EU and Swiss projects on finance and sustainability. In particular, between 2014 and 2018 he has been the coordinator of the EU Future Emerging Technologies projects SIMPOL and DOLFINS investigating how to improve financial stability and how to better channel finance towards sustainability in a networked economy.
Mitch CarpenMitch has over 25 years of experience designing, leading and implementing a broad range of growth, realignment and startup initiatives in the finance, risk and portfolio management functions of global financial and governmental organizations. He recently worked with the State of New Jersey and McKinsey & Co. as the Executive Director to startup an energy infrastructure bank. Previous to this, he worked with The Bank of Tokyo-Mitsubishi in Singapore as an Assistant General Manager where he led the startup of the risk function for their newest regional headquarters. He has also held senior leadership positions at Societe Generale, Prudential Financial and Reuters. Mitch has a Master’s degree in Mathematics of Finance from Columbia University in New York City.
Mark CorneliusMark works at the Prudential Regulation Authority - part of the Bank of England. He is Head of the Division that regulates and supervises the major life insurance groups within the UK. He leads some of the Bank’s workstreams on sustainable finance and the financial risks facing insurers from climate change. Prior to joining the PRA, Mark was the Bank’s Chief Press Officer for three and a half years. He has spent nearly all his career working as a macroeconomist, predominantly at the Bank of England, where he has headed the Inflation Report and International Divisions. He served as Mervyn King’s Private Secretary, when Lord King was Deputy Governor. Mark has also worked at HM Treasury, the Cabinet Office and the CBI. Mark has degrees in economics from the University of London and Cambridge University.
Francesca GostinelliFrancesca Gostinelli is the Head of Group Strategy at ENEL Spa.
Andrea FedericoAndrea Federico is a Partner at Oliver Wyman. Andrea is responsible for Oliver Wyman’s work with central banks, regulators and development banks across EMEA and beyond. Andrea is also the managing partner of Oliver Wyman – SPP, an internal unit solely devoted to acting as a global trusted advisor to financial services authorities on issues relating to governance arrangements, effective decision making, financial stability et alia. The unit is truly unique across the industry due to its specific focus and the team’s composition that comprises a number of former senior public officials and tenured strategy consultants. Oliver Wyman – SPP is chaired by Sir Andrew Larger, formerly Deputy Governor of the Bank of England. Andrea’s recent work includes regulatory and financial sector reform, asset quality review and stress testing, resolution frameworks and strategies, governance arrangements and effective decision making for Central Banks boards.
Ilya KhaykinIlya Khaykin is a Partner with deep banking and risk management expertise and backgrounds in physics, engineering as well as public policy. Ilya has led our work on the topic of climate risk and opportunity assessment. He worked in depth with private sector institutions, development banks and regulatory bodies in the Americas, Europe and the Middle East on a range of risk management topics including credit risk, climate risk, risk identification, stress testing, country and political risk, resolution planning, and capital management. Ilya currently serves on the IIF Sustainable Finance Working Group.
Anne PlatouAnne Margrethe M. Platou is Sustainability Manager at DNB Bank. DNB Bank is the largest financial institution of the Nordics, based in Oslo, Norway. In DNB, Anne is part of the Corporate Responsibility team and covers climate risk, environmental management and TCFD disclosure. She currently leads the bank’s efforts in quantifying climate risk in credit activities. Anne has 10 years’ experience from energy companies Equinor and Statkraft, working with corporate responsibility and climate-related issues in both oil & gas and renewable energy projects in Norway, South East Asia and East Africa. Anne holds an MSc Sustainability management from Columbia University, MSc EU Policy making from LSE and BA Political science from University of British Columbia.
Alban PyanetAlban Pyanet is a Principal in the Finance & Risk Management practice of Oliver Wyman. Alban has worked in depth with major financial institutions in North America and in Europe, with a focus on climate risk management, credit risk modeling, and stress testing. Alban has been leading the climate risk engagements for Oliver Wyman, including a project with the United Nations Environment Programme – Finance Initiative (UNEP FI) and a group of 16 global banks, which aimed to develop a methodology to assess climate risks and opportunities and help banks implement the recommendations of the Financial Stability Board’s (FSB) Task Force on Climate-related Financial Disclosures (TCFD). Alban has authored several publications on the topic of climate risk and serves on the finance panel of the SENSES project, a global expert working group committed to developing the new generation of climate.
Bas van RuijvenBas van Ruijven is a Senior Research Scholar with the Energy (ENE) program at IIASA and co-chair of the International Committee On New Integrated Climate change assessment Scenarios (ICONICS). Between 2011 and 2017, Dr. van Ruijven worked as Project Scientist with the Integrated Assessment Modeling group at the National Center for Atmospheric Research (NCAR) in Boulder, CO, USA and was Research Scientist at Boston University. Before 2011, Dr. van Ruijven was Policy Researcher with the IMAGE IAM group at the Netherlands Environmental Assessment Agency (PBL). Dr. van Ruijven's research interests cover a wide range of topics, from energy and technology scenarios to energy transitions in developing countries and the impacts of climate change. Current projects include a global analysis of the role of electricity interconnections in greenhouse gas mitigation and guidance of mitigation scenarios for financial sector analysts.
A BA/MA degree in Law, Economics, Management, Political Science or equivalent degree, or equivalent professional experience, is recommended to be able to follow the course.
A basic knowledge of financial markets regulation and prudential risk management is required to follow this course. A prior exposure to risk modeling is recommended.
Participants are required to bring their own laptops with Microsoft Excel installed.
Participants will be selected to ensure a balanced representation in terms of expertise and geographical coverage.
Please consider that your application is not confirmed until you will receive further information by the FBF secretariat.
1950€ – Public Authorities (e.g. National Competent Authorities, Central Banks) and European Institutions
2350€ – Private Sector
950€ – Academics (Full-time Professors, full-time PhD Students and full-time Research Associates) *seats for academics are limited. All payments must be put on hold until the FBF secretariat confirms the registration.
The course fee covers coffee and lunch breaks. Travel and hotel costs are not included.
No group deals apply to this course.
A few scholarships are available to outstanding candidates applying from low-income and lower-middle-income economies (as set by the World Bank) in the Americas, Africa and Asia.
Scholarships cover the whole course fee and 3 nights’ accomodation in Florence.
The deadline for scholarship applications is August 31st. To apply for a scholarships, send your CV and a cover letter to the course secretariat at firstname.lastname@example.org.
- In case a course is cancelled, registered participants will receive the full refund.
- In case a course is moved to another date, registered participants may request a voucher to attend another FBF course.
- Registered participants who cancel their participation will receive a voucher to attend another FBF course.
For more details, please contact email@example.com
- Hotel Villa La Stella (20 min walking distance from EUI )
- Hotel Cellai
- Hotel de la Pace
- Hotel Il Guelfo Bianco
- Hotel Rosso 23
Suggested restaurants in Florence city centre
- Restaurant Accademia – Ph. +39 055 217343
- Restaurant Cucina Torcicoda – Ph. +39 055 265 4329
- Finisterrae – Ph. +39 0552638675
- La Cucina del Garga – Ph. +39 055 475 286
- Il Vezzo – Ph. +39 055 281096
- Osteria di Giovanni – Ph. + 39 055 284897
On arrival, participants will be provided with temporary wi-fi access for the whole duration of the course.
General information on local transport
From Florence airport:
Florence airport is located 8 km from the city centre, approximately 30 minutes by taxi or bus. Taxis can be found outside the arrivals terminal; no reservation is needed. A taxi ride from the airport costs about €20 and takes approximately 25/30 minutes.
The airport is also connected to the main railway station in Florence by a shuttle bus (‘Vola in bus’) that leaves every 30 minutes (on the hour and on the half-hour) and takes 25 minutes. Tickets are available on board for €6.00.
From the central railway station:
Take bus n. 17 to via Venezia. Change to bus n. 7 direction ‘Fiesole’; get off at the stop ‘San Domenico 01’. For bus routes and timetables consult: http://goo.gl/Ydj8K
Bus tickets are sold outside the railway station, at ATAF ticket kiosks and vending machines, tobacconists (tabacchi), newspaper kiosks (edicole), and most cafes (bar). They must be bought before boarding and stamped using the machine on the bus. A ticket costs €1.50 and it is valid for 90 minutes. Bus tickets can be purchased also on board (€ 2.50), but the driver is not obliged to give change.
From the A1 Milano-Napoli (Autostrada del Sole), take the Firenze Sud exit and follow directions to the city centre/Stadio. Follow the directions to the stadium (Stadio), then for Fiesole. San Domenico is on the main road to Fiesole.
The EUI has several free parking areas available all over the Campus.
Course materialRegistered participants can access the course material using the password provided by the FBF secretariat.