This Climate Risks Online Academy co-organized by Oliver Wyman and the Florence School of Banking and Finance (EUI), in scientific cooperation with the EUI’s School of Transnational Governance, combines the expertise and tools of the financial industry to assess and grasp the risks posed by climate change to the financial sector. To understand the physical risk exposure of the financial system, it is essential to realise the link between physical phenomena such as global warming, sea level rise, more frequent flooding and droughts with the corresponding financial losses and risks. The same goes for transition risks and it’s still poorly understood repercussions.
The Academy is held in a context in which climate change is deeply transforming the role of central banks and, in particular, is leading to a re-evaluation of central banks’ financial stability mandate. It is also impacting prudential authorities. Instead of examining how the risk landscape has been altered by climate change, the Academy will review practical approaches for quantifying their impact and explore best practices for integrating climate risk into both prudential and risk management frameworks.
This online Academy has been designed for staff members of financial institutions, micro-prudential and macro-prudential authorities who wish to deeply understand the crucial risks that climate change pose to the financial system. In addition to providing topical content and practical tools, this online Academy will also act as a platform to stimulate exchange and debate between public officials, academics and private practitioners.
Identify climate-related financial risks and the impact of climate change on the financial sector;
Understand how the financial sector is exposed to the different implications of climate change (from sea level rise to carbon pricing);
Calculate and quantify climate risks and exposures (e.g., climate scenarios, transition risks) under a series of given assumptions;
Debate the impact of physical risks on the global economy;
Link climate risks with wider macro-financial variables;
Design state of the art climate scenario designs;
Define and leverage climate scenarios to quantify their potential financial impacts on financial institutions;
Discuss how climate risks can be incorporated into an institution’ risk management framework and how risk management approaches can be adjusted to capture climate risks;
Comprehend the role of central banks to hold financial stability from climate-related risks;
Describe the potential implications of climate change for financial stability;
Review latest EU climate action instruments and discuss emerging climate regulatory risks.