Where next for Climate Screening?

16:15 Tuesday 28 May

OC084

Room S7

 

Ben Smith (United Kingdom) 1; Thomas Downing (United Kingdom) 1

1 - Global Climate Adaptation Partnership

The last 5 years has seen an increasing focus on the development of systems to help financial institutions manage climate risks. In this presentation we reflect on tailored climate screening systems we have developed to assess the climate risks faced by projects developed by the African Development Bank and European Investment Bank, and how we see the field developing over the next 2-3 years. In particular we highlight 5 key principles which should underpin effective climate risk management systems:

Bespoke requirements: the principles for any climate risk management system remain the same, but the detail, data requirements and assessment methods which are appropriate depend on the exact requirements of the client.

Integration: it is critical is that any system aligns with existing processes for assessing projects, and becomes a standard part of how projects are assessed

Ownership and champions: internal champions who will drive forward change and create a community of practice around climate risk management are critical in embedding climate screening systems within organisations.

Extensive engagement: the design of any system has to be informed by an extensive process of engagement with staff throughout the organisation. What works for one division may not work for another, what works for one type of project will not work for other types.

Adaptation, not just risk: identifying risks to projects is an important step, but, having done that, there also needs to be a process to help staff appraise and choose options to manage those risks.

The presentation concludes by looking ahead at key developments which will shape climate risk management over the next 2-3 years:

  • A focus on assessing opportunities for Climate Action and the mobilization of Climate Finance.
  • The integration of climate risk management beyond financial institutions and across the private sector, with a focus on identifying risks to business processes, and opportunities to shift business strategies to increase resilience.
  • Opportunities to harness the growing number of big datasets, and open data, in climate risk assessments.