March 12, 2019

PRA and FCA hosted, on March 08, 2019, the first meeting of the Climate Financial Risk Forum (CFRF). The forum brings together senior representatives from across the financial sector, including banks, insurers, and asset managers, to develop practical tools and approaches to address the financial risks from climate change.

At its first meeting, the forum decided to set up four working groups to focus on risk management, scenario analysis, disclosure, and innovation. Each working group will be chaired by a member of the forum and will meet more frequently than the CFRF, reporting back at each CFRF meeting. The aim is to produce practical guidance on each of the four focus areas. The final outputs will be shared with industry more widely. Membership of the working groups will be wider than the forum to allow them to draw on expertise as necessary, such as from academia and industry. The forum is chaired by Sarah Breeden (Executive Director of International Banks Supervision, PRA) and Christopher Woolard (Executive Director of Strategy and Competition, FCA). The forum will meet three times a year and will report to Sam Woods (CEO of PRA and Deputy Governor at BoE) and Andrew Bailey (CEO of FCA).

Climate change and society’s response to it presents financial risks that are relevant to the objectives of PRA and FCA. While these risks may crystallize in full over longer time horizons, they are becoming apparent now. Firms are enhancing their approaches to managing these risks, but face barriers to implementing the forward-looking, strategic approach necessary to minimize the risks. The CFRF aims to reduce these barriers by developing practical tools and approaches to address climate-related financial risks. Membership of CFRF is representative of the UK financial sector, including firms of varying size, business model, and maturity of approach to climate-related risks. The CFRF members from the banking sector include BNP Paribas, HSBC, JP Morgan, and RBS.


Related Link: Press Release

 

Keywords: Europe, EU, UK, Climate Financial Risk Forum, Climate Change Risks, Climate Risks, PRA, FCA

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